Jyske Bank Wins Negative-Rates Case, Easing Danish Industry Risk

(Bloomberg) – Jyske Bank A/S won a court war that was closely monitored for the use of negative interest rates for retail customers, a decision of Denmark’s financial industry from the risk of major compensation allegations.

On Monday, the Commercial and Maritime Court in Copenhagen, together with JYSKE, found that the general conditions of the bank related to variable rates provided enough contract basis to give interest to certain deposit accounts below zero. The consumer claimed that the conditions were very uncertain and the basic changes required open customer consent, but the court rejected this view.

The decision is the first example of its species in Denmark and there will be a relief for a wider industry. In 2019, Jyske was the first lending to carry deposit rates as a minus, but almost all Danish banks followed a wide range of contract conditions to adjust the deposit conditions. For Jyske, a defeat could have been a precedent that threatens the entire industry with the backward obligations entering billions of crowns.

Jyske Bank’s law director Martin Skovsted-Nialsen said, “It is a complex and principled issue that can have potentially impacts on the banking sector .. “Therefore, we are very pleased and relieved to be approved in the basic aspects of the case today.”

Jyske Bank shares increased to 1.8% in Copenhagen, gaining momentum in the local comparison index.

Consumer Ombudsman said that he is now reviewing the decision and it was too early to decide on a potential charm.

Denmark’s Central Bank had Zero lower monetary policy rates for ten years between 2012-2022, a world record.

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