Business Round-Up: Most banks dropping negative interest charges

Following the news that Nationalbanken is raising interest rates, most of Denmark’s high street banks have confirmed they will no longer charge account holders interest on their savings.

Since last year, account holders have been made to pay interest on holdings in excess of 100,000 kroner.

But on Thursday, both the country’s central bank and the European Central Bank confirmed a 0.75 percentage point increase in interest rates.

Since then, the likes of Danske Bank and Nordea have confirmed they will be ending the charges – on October 1 and September 20 respectively.

Three remain undecided
However, three major banks – Sydbank, Spar Nord and Jyske Bank – have not yet confirmed they will stop charging. It does not sit easily with Forbrugerrådet Tænk.

“The argument that the banks have used for negative interest rates was precisely that Danmarks Nationalbank had negative deposit rates, and that has completely disappeared now,” Forbrugerrådet Tænk economist Michael Bruun Pedersen told DR.

“There is so much pressure on them from the public and from their customers that they have to remove the negative interest rates.” 

Among the banks to already drop the charges are Saxo Bank (July 1), Nykredit Bank (July 22), Arbejdernes Landsbank (Aug 1), Lån & Spar Bank (Aug 1) and Ringkjøbing Landbobank (Sep 1). 

Ecco and Rockwool criticised for activities in Russia
Ecco and Rockwool have been criticised by MPs for continuing with their business operations in Russia despite the ongoing War in Ukraine. Lisbeth Bech-Nielsen, the financial rapporteur in Parliament, is among those to speak out. “Shame on you who profit off of dead Ukrainian children; your actions are only legitimising Putin,” she said. Rockwool argues that leaving Russia will only benefit the Russian state as it will simply take over the company’s activities.

Danish dairy producer to stop importing soya beans
Dairy producer Thise Mejeri will stop importing soya beans and instead create its organic milk from cows fed with broad beans that have a high protein content. Broad beans are also a more environmentally friendly approach compared to soya beans, as there will be less of an import footprint. Soya beans are typically produced in areas such as Brazil where parts of the rainforest are cut down to make room for soya production.

Increase in those receiving financial support
In the second quarter of 2022 there was an increase in the number of people receiving financial support from the government: a rise of 5,200 to 99,200. It’s the first quarterly increase since Q2, 2020. Support paid out to foreigners also increased, largely due to the number of Ukrainian refugees entering the country. The increase of 8,400 represented a 88.9 rise.

Building costs increase
In the second quarter of 2022 there was a 3.6 percent increase in the cost of building projects, according to Danmarks Statistik. A 3.8 percent rise the cost of materials was partly responsible, along with a 3.1 percent rise in the cost of labour. Between the second quarters of 2021 and 2022, building costs have risen by 9.9 percent.

Increase in tourism in Denmark
In 2022 there has been an increase in the number of people staying overnight at hotels, holiday centres, camping grounds and hostels – especially in the month of July. Numbers in that month totalled 8.3 million, up 800,000 compared to July 2021. The numbers are even higher than before COVID-19. However, the number of overnight stays by Danes at hotels in Denmark fell by 960,000 to 5.1 million.

Tomato production will stop during winter
Tomato production will decline this winter due to the high energy prices rise. Mads Pedersen, the CEO at Nordic Greens, one of the largest tomato producers in Denmark, has conceded that for the first time in 15 years the company will be unable to produce tomatoes during the winter months due to the huge costs of keeping greenhouses warm enough. Cucumber production will also be hit.

New electric trucks make delivery of bottle deposits more environmentally friendly
Dansk Retursystem has bought two eAcros 300 electric trucks from Mercedes-Benz that will make it cheaper and more climate-friendly to handle its pant returnables. Annually the two trucks will save 62 tonnes of CO2 emissions in comparison to the diesel cars previously used. Within the last seven years Dansk Retursystem has cut its CO2 emissions by 40 percent thanks to new packaging methods. It has a goal to be carbon neutral by 2030.

Increase in bankruptcies after corona loans stop
Some 230 companies went bankrupt in August according to Danmarks Statistik. Many had to close after the government stopped handing out loans and COVID support packages. Others were unable to pay taxes postponed by the pandemic. Rising energy prices and high inflation also contributed to their woes. Compared to the month before, the number of companies going belly up increased by 9.6 percent.

Women have larger lifelong pensions
Women aged 60-64 have a more lucrative lifelong pension compared to men in the same age group. On average in 2021, women of that age had 566,000 kroner in their pensions, while men had 503,000 kroner. However, men are still more likely to have more valuable instalment pensions, which tend to be 140 percent higher. Lifelong pensions are typically paid monthly whereas instalment pensions are typically paid over a period of 10 to 30 years.

Coop turns down use of light to lower energy use
Coop is expecting its electricity bill to rise by 500 million kroner this year, despite its efforts since 2016 to cut its energy use. The use of more efficient lightbulbs, for example, had cut its bill by 20 percent, and it now plans to install solar panels to take advantage of warmer temperatures in the country. Generally turning off more lights is favoured: on September 5, 300 Coop supermarkets turned off their lights altogether to lower their energy use and more such demonstrations are expected over the autumn and winter

Pension values fall for the Danes  
During the first six months of 2022, Danish pension companies lost 544 billion kroner, according to Nationalbanken. PFA lost 77.6 billion kroner while AFT lost 56.6 billion kroner. Rocky financial markets and rising costs are mostly to blame.