houses The Spaniards follow decrease money they have deposited allocate to both other investment and savings products in banks more profitable to cushion the blow high inflation. Therefore, in the services of families and non-profit organizations (such as NGOs and cultural, sports and religious associations) 984,758 million in euros deposits and accounts The current situation in financial institutions as of the end of July, 12,675 million and 1.27% less than a year ago, and 5.502 million and 0.55% less than in June, according to data released by the Bank of Spain on Tuesday. from an all-time high trillion euros Deposits reached last December were withdrawn 19,584 million from banks (18.648 million households and the remaining associations), 1.94% of the total.
An important factor explaining this is low pay These organizations offer traditional savings. The European Central Bank (ECB) increased the main interest rate between July 2022 and last July 0% to 4.25% To combat inflation, the deposit facility, which is the interest paid on money stored in banks and most relevant in the current context, remained at its highest. 3.75%. Despite this, the interest paid by businesses to households new time deposits grew a lot less from 0.15% to 2.21% last june. Also, around 91% of the money not in these time deposits that families have in banks, view accountsalmost uninteresting from 0.02% to 0.12%.
Banks’ resistance to increasing deposit rates has led families to bet on Treasury bills. As a result of the European Central Bank’s rate hikes, interest rates on these short-term debt securities have increased. negative levels Payable at the beginning of 2022 (Government returned less than it received) 3.5% and 3.7% In the last auctions. As a result, families 16,608 million euros The letters at the end of June are the highest number since 2002 when the statistics started, and that compares to barely 19 million in the same month of 2022. first Spanish owner Treasury bill data is ahead of banks for the first time since.
mortgage depreciation
Another factor that explains the decrease in the money deposited by citizens in banks is the unusual situation. an increase in the cost of floating rate mortgage payments. In addition, the average interest rate of the loan portfolio for housing purchases increased rapidly as a result of the ECB’s rate hike. from 1.1% from the end of 2021 at 3.19% last june. A very strong blow to family finances that households who can afford it are trying to mitigate early payment some of your loans reduce quota (with less paid per month) or Shorten the time Term of the loan (less interest is paid in the long run).
Thus, between January 2022 and March 2023, families made an early payment equivalent to a monthly payment (more than required for their regular payment). 9.2% of variable mortgage balance 6.4% of the current and fixed rate mortgage portfolio at the end of 2021. And this trend has accelerated in recent months. Last year, households allocated some depreciation between regular and cash payments. 54.7 billion eurosThey made allocations for this purpose in the first half of 2023. 37,532 million, However, it can be predicted that the year will be closed with a much higher depreciation figure compared to 2022.
financial investment
The third target of citizen savings consists of mutual funds that invest specifically in fixed income and provide increased returns similar to Treasury bonds. Thus, households in the first quarter net subscriptions -gross contributions minus withdrawals- for approximate value 12,564 million The euro was the highest quarterly figure since 2015, when the Bank of Spain statistics began.
Families also increased their contributions between January and March. insurance and pension funds (at 2.334 million), but they dropped it Movements (in 1,163 million) and other species stock assets number of companies (1,882 million). For reference, the value investment individuals in companies mountain goat 35 In June, it increased by 14.6% compared to the same month of the previous year and rose to 86 billion 743 million. However, in the same period, selectivity increased even more (18.5%), which means that citizens About 2.950 million withdrawn the companies in question in these twelve months.
Evolution in the short and medium term Among all these destinations for household savings and investments, in any case, uncertain. On the one hand, banks are gradually increasing interest rates. deposit interest. On the other hand, demand and types literature They are showing signs of stabilization as the ECB signals the end of the rate hike cycle. Third, we’ll see how this will be affected. financial markets increasing slowdown in the euro area economy.