The fees and interest rates of banks have increased significantly in recent years, putting increasing pressure on small and medium-sized enterprises, according to a new analysis from SMVdanmark.
According to the analysis, bank fees have increased by 38.6% since 2015. At the same time, companies' interest expenses for mortgage loans have more than doubled since 2021 - a development which, according to SMVdanmark, is far above inflation in the same period.
- It is a dramatic development, and it particularly affects smaller companies, which have less time and fewer resources to negotiate better terms compared to larger companies, says deputy director Alexander Søndergaard, who is responsible for policy and analysis at SMVdanmark.
Lack of competition
The analysis also points to a high interest margin in the banks. Companies pay an average of 5.8% interest on loans but only receive 2.1% on deposits. According to SMVdanmark, this leaves companies with a large loss in interest income, while banks strengthen their earnings.
SMVdanmark calls the development a sign that competition in the banking market is not functioning satisfactorily and calls for greater transparency and increased competition in the banking and mortgage sectors.
The organisation urges the business minister to demand more openness and real competition if the banks do not change course themselves, as the rising financial costs, according to SMVdanmark, can hinder companies' investments and growth.
