An internal Santander memo leaked to Guardian Money says 10% of its global profits come from international cash transfers, and it charges six times more than newer rivalsWhen senior Santander executives gathered in the principality of Andorra in January this year, the bank’s “innovation director” warned that a large chunk of its profits were at risk – because the juicy margins it earns on money transfers could be destroyed by new competitors. The documents supporting these claims have since been leaked to Guardian Money, and reveal that Santander made €585m from money transfers – equal to nearly a tenth of its 2016 global profit of €6.2bn – and that it charges six times as much as rival TransferWise for sending £10,000 from the UK to Spain.What the documents expose is just how much the big banks are making from giving customers poor exchange rates, with the bulk of their profits coming from the so-called “FX margin” rather than the fees directly charged. The FX (foreign exchange) margin is the difference between the exchange rates available in the money markets and the rate that a bank offers a customer. Continue reading…
Source : theguardian.com
Read more…Revealed: the huge profits earned by big banks on overseas money transfers
