ABN Amro promises no negative interest on deposits up to 100,000 euros

Credit: REUTERS/PIROSCHKA VAN DE WOUW

Dutch bank ABN Amro said on Wednesday it would not charge negative interest on deposits up to 100,000 euros ($110,200), amid political pressure to exclude retail clients from the effects of ultra-low interest rates.

Recasts with promise not to charge negative interest on deposits up to 100,000 euros, adds CEO quote, more detail

AMSTERDAM, Nov 13 (Reuters) - Dutch bank ABN Amro ABNd.AS said on Wednesday it would not charge negative interest on deposits up to 100,000 euros ($110,200), amid political pressure to exclude retail clients from the effects of ultra-low interest rates.

"This commitment means that around 95% of our clients, representing approximately 40% of our deposit base, will be safeguarded from negative rates," Chief Executive Kees van Dijkhuizen said at the presentation of the lender's third quarter earnings results.

European banks are grappling with the consequences of the European Central Bank's September decision to cut its key deposit rate further into negative territory, making it tough for banks to earn money from their traditional lending business.

Dutch finance minister Wopke Hoekstra in September said he would talk to banks about the consequences of negative interest rates, but resisted calls by politicians for an outright ban of them for smaller deposits.

ABN on Wednesday also reported a more-than-expected 24% drop in third-quarter net profit, to 558 million euros, due to higher costs for client oversight as the lender tries to come to terms with strict anti-money laundering rules.

Dutch prosecutors in September started an investigation into ABN Amro, one of three dominant banks in the Netherlands, which they say for years failed to detect money laundering and to report suspicious transactions.

Banks have been forced to keep better track of client behaviour after Dutch bank ING ING.AS was forced to pay a record $900 million fine in September last year for neglecting criminal activity financed through its accounts.

($1 = 0.9074 euros)

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(Reporting by Bart Meijer; Editing by Muralikumar Anantharaman and Christopher Cushing)

((Bart.Meijer@thomsonreuters.com; +31 20 504 5006; Reuters Messaging: bart.meijer@thomsonreuters.com))

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