Lwith Increase in interest rates promoted by the European Central Bank (The ECB) has been putting millions of families with variable mortgages against the ropes to combat high inflation since July last year. Banks are quickly transferring the recovery in collections. On the contrary, they are not going at the same pace when it comes to doing the same with their customers’ deposits.
Since mid-2022, the euro regulator has approved successive increases in the price of the currency. Scaled from 0% to current 3%. A development transferred to Euribor, the benchmark benchmark for the majority of variable mortgages, average increase of about 250 per month. However, the average return on one-year deposits in Spain was 0.42% Last December, below meaning EU (1.34%and countries like France or Italy they pay about 2%.
allegation
According to reports from organizations, such a situation “forces” an adjustment to “fair” remuneration. Adicae, Asufin and Üçgal. They all agree that an increase in interest rates should affect deposit returns to the same extent.
Against this version, Spanish Banks Association (AEB) He argues that deposit rates are already rising. “The return of monetary policy to normal also requires a return to normalization in the remuneration of savings.” They also point out that it is “not easy” to make an international comparison. Different banking systems in Europe have their own characteristics and are different from others.. AEB, “In an intensely competitive environment, it cannot be generalized as each entity always makes its decision according to its commercial policy.”
Why don’t they pay more? Large institutions feel that they are in a strong position in terms of solvency and have ample liquidity from both the ECB injections and the savings created during the pandemic, and they don’t need the money for now. High returns are not expected at this time, although they may have to pay more to savers in the future as interest rates continue to rise.
conditioned by species
“They have no incentive to do that. This is why there is no war for debts ”, reasons Patricia Suarez, the president of Asufin. “We believe it is the gradual elimination of ECB stimulus that will cause liquidity to decline and deposits to come to prominence over the course of the year. It all comes down to ratios, because we anticipate that if they don’t go down, they will enter a certain level of stability, which will continue to make a war for liabilities possible,” he adds.
Suárez sees more action in smaller banks than Asufin, “it offers more attractive products to the retailer as access to the ECB’s obligations is less easy,” says Suárez. “First of all, we found movement, when acquiring a new customerthrough payroll accounts that are starting to resurface”.
Adicae, for its part, criticizes the “Spartan resistance” of the major Spanish banks to provide a “minimum reasonable” fee for savings. They say it’s a behavior that contradicts the rate at which rate increases are channeled into financing housing or other consumer goods. They remember that over 10 years, mortgages changed 0.72% in just four months, and access to other loans became 1.29% more expensive.
record savings
Family deposits are at record levels and exceeded one trillion euros for the first time in December, according to the latest data released by the Bank of Spain. Saving on bank deposits in Galicia At the end of the third quarter of 2022, it amounted to 77,648 million after the increase about 10.4 billion since the outbreak of the pandemic. Despite these numbers, Adicae insists that many citizens are “forced” by organizations to allocate their investments into other products beyond accounts, such as mutual funds.
In order to guarantee the future stability of the sector and high inflation rates in the short term, they think that the banking business model “cannot live with its back to the consumers” and demand that it “normalize”. Against this background, the association urges regulators to “take action” so that consumers can also benefit from the rise in the price of money, without fear of a “possible non-aggression pact” in the industry.
customer acquisition
Banks are generally trying to offer other types of products, in the direction of attracting customers and trying to connect them as much as possible, but “not with the argument of offering a higher return on their deposits,” he analyzes in general. Secretary of the Consumers’ Union from Galicia (Ucgal), Michael Lopez. “They are interested in taking over the payroll, but not because they need the money, but rather because they have someone to sell their assortment of products and services” found in their portfolio.
He acknowledges that some increase in account fees has been detected, but this is “not a consistent response” to the evolution of interest rates, but rather “the opposite”. He believes banks “make cash” because of the price they put on all types of financing, not just mortgages but consumer loans as well. “It is almost impossible to find transactions below 12% in finance companies, especially when buying a vehicle in the second-hand market. The average is between 12% and 14%, which is extreme”, he concludes.