flatexDEGIRO to waive negative interest charge for all customers of the Group’s brands flatex, DEGIRO and ViTrade, following ECB’s interest rate decision
Expected return to positive interest rate environment holds significant earnings potential for flatexDEGIRO
European Central Bank (ECB) to raise the interest rate on the deposit facility, flatexDEGIRO AG Europe’s largest and fastest growing online broker, will pass on the resulting cost benefits directly to its customers and waive completely the negative interest charge for all customers as of 1 August 2022. Against the backdrop of currently more than 3 billion euros of customer cash under custody, a positive interest rate environment holds significant earnings potential for flatexDEGIRO.
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Frank Niehage, CEO of flatexDEGIRO: ”When we introduced the ECB deposit rate as a negative interest charge in 2017, we did so openly and transparently, not hiding it in other fee increases. At the time we promised: When interest rates rise again, we will abolish this negative interest rate. And our word is true. We are now keeping that promise. It remains to be seen whether other banks and online brokers will follow suit and roll back hidden fees now.”
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Muhamad Chahrour, CFO of flatexDEGIRO and CEO of DEGIRO: “With today’s interest rate decision by the ECB and the expected imminent steps towards a positive interest rate environment, a decade of zero and negative interest rates is coming to an end in Europe. Beyond the relief for our customers, this holds a significant earnings potential for flatexDEGIRO, without us taking on an increased investment risk. The resulting further strengthening of our earnings and financial power provides us with additional and sustainable advantages over online brokers, who cannot access this potential due to their lack of a banking license.”
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