The positive effects of the European Central Bank’s quantitative easing policies have “dried up”, according to the chief executive of one of the eurozone’s largest retail banks.

In an unusually outspoken call with analysts on Thursday, ING chief executive Ralph Hamers said further stimulus would damage consumer confidence without helping the central bank reach its inflation target.

“We have to move away from the policy that is currently anticipated . . . the discussions and ideas around how to stimulate inflation I think are not going to help,” he said.

Record-low interest rates have weighed on retail banks’ profits as they have been forced to lower borrowing charges and in some cases pay to store money at central banks, without a similar reduction in the rates they pay to savers. 

The ECB’s benchmark interest rate is currently minus 0.4 per cent, and outgoing president Mario Draghi said last week that he was “determined to act” to lift inflation towards its 2 per cent target, paving the way for further rate cuts or asset purchases in September. 

However, Mr Hamers said such measures would have little impact because the recent economic weakness was due to geopolitical uncertainties such as Brexit and trade tensions, rather than any shortage of credit supply.

“I don’t see any credit demand in Europe unanswered, so there’s no need for further liquidity to be injected,” he said. “I actually see that the negative rate environment is making consumers so uncertain about their financial environment that they’re starting to save more rather than less.”

The Financial Times reported on Wednesday that Swiss bank UBS was planning to introduce negative interest rates for its wealthiest clients in an attempt to adapt to the “lower for longer” rate outlook. ING already charges negative rates to large corporate and private banking customers and refused to rule out introducing them more widely. 

“That remains to be seen, [it] is uncharted territory to be quite honest,” Mr Hamers said.

He added that ING was testing several different ways to compensate for the lower rates, including introducing fees for some of its services that are currently offered for free.

The uncertain outlook cast a cloud over relatively strong second-quarter results published on Thursday. The Dutch bank beat forecasts for revenues and profits, attracting twice as many new customers as in the first three months of the year despite continuing pressure over anti-money laundering failures.

Revenues rose 4 per cent year on year to €4.7bn, in contrast to analyst expectations of stagnation. The increase, along with lower provisions for bad loans, helped it avoid a forecast drop in profits. Net profit inched up 0.6 per cent to £1.4bn, about £100m higher than consensus forecasts. 

Operating expenses also climbed 4.4 per cent, in part due to increased spending on know-your-customer and anti-money laundering systems. ING promised to improve its processes after it received a record-breaking €775m penalty from Dutch prosecutors last September. 

The bank was accused of a series of failures that allowed companies to launder hundreds of millions of euros and pay bribes over several years, and is now facing a separate investigation by regulators and judicial authorities in Italy. 

ING has been banned from taking on new clients in Italy since March. On Thursday it said it was “working hard to address the shortcomings and resolve the issues identified”, but it noted that it expected to face further inquiries in various countries.

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