January 5th, 2015

Since we covered this
subject previously, there have been significant changes within the Spanish
banking sector, principally to save failing Spanish banks. The Press has has
then had a field day as directors’ dealings and conduct are scrutinised, with
unsavoury findings.

But notwithstanding
all this, there seems to have been little improvement- complaints of poor
customer service and excessive charges are continually levelled at the
remaining Spanish banks. This is particularly the case from non- Spanish
account holders, who are used to free current account banking; and very modest
fixed rate charges for electronic funds transfers.

Nearly all Spanish
property owners are obliged to have a Spanish bank account, to pay property
outgoings; and also to have a Euro banking facility, for general expenditure in

But invariably, they
are shocked at the high charges for holding and operating a Spanish bank
account. And then the real sting for Spanish bank customers can come when a funds
transfer needs to be made, either in or out of a Spanish bank account.

Two cases have been
referred to us recently- one where a client made a transfer from their Spanish
Euro account to their UK Euro account (having sold their Spanish flat), and the
Spanish bank sought to charge 1,000 Euros for the transfer. Another, where an
inward receipt of Euro funds from a UK Euro account was charged at 300 Euros.
Both cases involved major Spanish banks; and in both cases when challenged, the
banks substantially reduced the charges.

It is curious that
Spanish banks should purport to charge such high fees in the first instance;
and then with little discussion, simply back down.

The first issue is
quite straightforward. UK nationals in particular, are accustomed to fairly
modest fixed fees (or even zero cost) when making electronic payments; and
routinely zero cost for electronic receipts of funds. In Spain however, when
the electronic transfers are international, (even transfers in Euros), the
default position in many cases, is for the bank to try to charge on a
percentage basis, rather than a fixed fee.

Clearly this is
commercially unjustifiable; as the process/ cost to the bank is identical,
whether the transfer is for 10,000 Euros or 1,000,000 Euros. So logically, a standard
fixed fee should be applied.

And also, the
implementation of the SEPA (Single Euro Payments Area) European Union
Regulations, is certainly a helpful factor for Spanish bank customers who are
concerned about high charges.

In Regulation
924/2009, the European Parliament decreed in particular, that charges for
electronic payments between EU member states (of up to 50,000 Euros) must not
exceed the applicable charge for an equivalent national transfer.

As national transfer
charges are very much lower (and generally zero for electronic receipts) the
SEPA Regulations should be introduced into the discussion with your Spanish
bank as to applicable charges, before any significant transfer into or out of
your Spanish bank account is authorised.

Quite possibly for
larger funds transfers, (and depending on the bank account terms) splitting the
payments into smaller amounts (sub- 50,000 Euros) can considerably reduce the
charges. Indeed, the most PR conscious Spanish banks are already including in
their standard terms, free transfers for up to 50,000 Euros within Europe,
waiving even the limited fee they would otherwise be entitled to charge under
the SEPA Regulations.

These are very
positive developments for Spanish bank customers; but during this process of
realisation/ change, it remains necessary to discuss and negotiate charges with
your Spanish bank before authorising significant funds transfers, so as not to
be caught by the bank’s default charging structure.

If necessary, new bank
account opening in Spain is now easier than ever before. A small amount of
research and paperwork can lead to huge savings, by moving to an alternative
Spanish bank that offers competitive charges as a standard feature.