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UBS to close one in five Swiss branches, charge negative rates - memos

Brenna Hughes Neghaiwi
·2-min read
Switzerland's national flag flies below a logo of Swiss bank UBS in Zurich

By Brenna Hughes Neghaiwi

ZURICH (Reuters) - UBS will close roughly a fifth of its Swiss branches this quarter and start charging negative rates on clients holding more than 250,000 Swiss francs ($280,646.61) or euros in cash from July, Switzerland's biggest bank said on Tuesday.

The bank announced the changes as the coronavirus pandemic boosts online banking over foot traffic and as persistently low interest rates, now expected to remain lower for longer, put pressure on the finance industry.

"It's becoming increasingly clear that we'll have to contend with negative interest rates for years to come. That's why we decided to lower the threshold for deposit fees," Swiss banking head Axel Lehmann told employees in a memo seen by Reuters.

The bank said it would factor in mortgages and investments clients had with the bank to determine whether to apply the charge, increasing the exemption threshold to up to 1 million francs for clients with such holdings, it said.

"In the end, less than 5% of our clients will be affected," Lehmann said in the memo confirmed by a bank spokeswoman.

The new annual fee of 0.75% applies to cash balances above 250,000 Swiss francs ($280,646.61) and 0.6% on cash balances above 250,000 euros ($303,925.00) and will be charged from July, lowering the threshold from currently around 2 million Swiss francs.

In a final shake-up of its Swiss business under current head Lehmann, the bank will also close around 40 of its 239 Swiss branches by the end of March, following rival Credit Suisse's strategy of favouring digitalisation over a physical footprint.

The news was first reported by Swiss newspaper NZZ.

The closures will not result in any layoffs "at the moment," Lehmann said in a second memo, adding employees would be redeployed to other branches or areas wherever possible.

Lehmann is due to be replaced by current operating chief and EMEA head Sabine Keller-Busse on Feb. 1.

($1 = 0.8908 Swiss francs)

($1 = 0.8226 euros)

(Reporting by Brenna Hughes Neghaiwi, editing by John Revill)