Companies banking with HSBC have to pay a maintenance fee of up to €360 a year as from this year, with the bank defending itself, saying it had absorbed a considerable amount of the costs associated with corporate clients.

The fee is going to be levied across the board – although some concessions were made for particular categories. Clubs and associations, for example, will have to pay €27 a month, while sole traders and condominiums will pay €12.

The bank was asked whether non-profit making entities would have any concessions but the reply from the bank spokesman ignored that question, stating: “The costs of providing banking services have increased reflecting higher regulatory standards which provide benefit to the overall financial system and all those who use it.

“These increased costs, which are tiered to reflect complexity, are reproduced in our revised banking tariff for business customers, however a significant proportion of the associated costs have been absorbed by the bank and not passed on to clients.”

The Malta Employers’ Association was less than impressed by the move – as well as the reason given by the bank – with director general Joe Farrugia telling the Times of Malta: “HSBC’s arbitrary decision to introduce a monthly maintenance fee on businesses, and apparently on any organisation which can be considered to be involved in any commercial activity – such as schools – is certainly not welcome by the business community. 

“The bank’s expressed intention of improving relationship with its customers through such a measure is contradictory, as what is being understood by companies is that this is just another administrative cost. It is difficult to discern any benefits to the bank’s clients arising from the introduction of a maintenance fee.”

No similar fees could be found on the website of the other leading bank, Bank of Valletta, although at least one other bank levies annual corporate charges.

However, sources close to the commercial sector warned that it might just be a matter of time: “Once they see that HSBC has taken the plunge, they might just follow suit.”

Fee for 'parking' cash

HSBC Bank Malta is also charging companies who keep too much cash in their accounts. It is going to charge them 0.4 per cent for ‘parking’ the money there, when the credit balance is €2 million or over in the case of financial and non-banking financial institutions, and €10 million or over for non-personal customers. 

On this point, the HSBC spokesman said: “The EU-wide negative interest rate environment means that surplus deposits held by banks result in significant costs which are not passed on to customers. Our revised tariff will enable the bank to continue to provide these services and recover any ancillary operational costs which are incurred to in the course of providing services to financial institutions that hold accounts with us and a small number of corporate customers that hold large balances.”

Bank of Valletta's website indicates a similar fee.

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