This Spanish banks not only do they not increase the fee they pay for deposits to private customers, but even they reduced. The average rate of new deposits to households in January was 0.59%, slightly below 0.64% in December. It may not seem like a major change, but to put it in perspective, Spain and Cyprus sectors were the only ones to lower their wages According to data released by the European Central Bank (ECB) this Friday, these savings products are in 19 countries in the eurozone.
For this reason, Euro zone banks increased new deposit rates by 0.19 percentage points on average they paid families 1.64% in the first month of the year, two and a half times more than Spanish establishments. Malta (0.38), Slovakia (0.29), Belgium (0.28), Luxembourg and Austria (0.27), facing lower payouts in sectors Spain (0.05 points) and Cyprus (0.15) ), there were notable increases in countries such as
Spanish banking, therefore, the fourth that pays less New deposits ahead of Portugal (0.56%), Greek (0.49%) and Cypriots (0.25%). At the other extreme are countries like France, Italy (2.12%), Slovakia (2.06%), and Austria and Belgium (2.03%), where families hired at an average rate of 2.37% in January.
Lowest payment for deposit realized in Spain in line with the new increase in the average rate mortgage. The increase was 0.28 points, the sixth highest recorded in the euro area in the month and above the average of 0.16 points. Home purchase loans subscribed to by families therefore had an interest rate of 3.19%, higher than the euro area average (3.1%), although still the seventh lowest in the monetary union. As a result, the profitability of banks from new customers (the difference between mortgage and deposit interest rates) increased from 2.27 to 2.6 points.
control print
The decrease in the fee paid by Spanish banks for deposits came in the context of increasing pressure on them to increase the fee. ECB chief Christine Lagarde on Thursday encouraged customers to go to their organization to demand a higher payout. “Bank customers have to have this conversation with bankers and bankers must be sensible if they want to retain their customers. The alternative is to switch banks,” he said in an interview on Antena 3.
The senior French official pointed out that, in fact, Spanish banks are one of the lagging European banks in repayment of liabilities. Bankers “must not forget to pay deposits,” he pointed out, that’s one thing. It’s already happening in “quite a few European countries”, but not yet in Spain. “I really hope consumers will have these conversations with banks,” he insisted.
inflation and profit
The ECB wants banks to pay more on deposits to help them meet its target. The goal of curbing the inflation spiral. For this reason, interest rate increases try to reduce the demand of economic units in two ways, trying to cool the economy in a way that fights inflation. On the one hand, making credit more expensive so companies and households find borrowing more difficult and burdensome. On the other hand, increasing the value of savings to encourage such savings and prevent the money from being used for spending or investing.
But Spanish banks have resisted for months to significantly increase the yield on deposits. They claim that when ECB rates are negative, they do not pass this on to their individual customers (which would force them to charge for deposits). It cost them a loss and now they are trying to make up for it. increase their profitability for their customers. They also say that they have plenty of liquidity and do not need to withdraw deposits, and that it is more profitable for their clients to contract with mutual funds in public debt that they offer (more profitable in theory than deposits, but also higher commissions).