Banks move towards price war

The Netherlands’ biggest banks are lining up for a high street price war, the Financieele Dagblad reports on Friday.

The paper says the merger of ING and Postbank and the takeover of ABN Amro’s Dutch consumer operations by Fortis means the banks will benefit from millions of euros in cost reductions which they plan to pass on to customers.
‘We will use part of the savings to sharpen up mortgage interest rates and increase the interest on savings,’ ING Nederland chairman Nick Jue told the paper.
Fortis Bank Nederland chairman Jan van Rutte said the bank does not want a price war. ‘We will keep an eye on the price-quality ratio but in competitive markets, like those for mortgages and savings, we will calculate on synergy benefits,’ he told the paper.
Fortis expects to be able to save over €1bn through the takeover while ING expects to boost its annual earnings by €440m because of the merger.
ING also plans to reduce the number of savings products it offers from 75 to 21. One of the accounts to go is the much criticised Postbank Plus account which offers just 0.5% interest.

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