wild climb inflation and the consequent tightening of monetary policy. central banks becomes a reason to fight revolution in business strategy banking Spanish was unimaginable until a few months ago. Therefore, major financial institutions are getting ready to launch. pay deposit from his return summer. If their plans are approved, they will break an almost uninterrupted trend. down in debt types 14 yearsIt started after the collapse of Lehman Brothers in October 2008. Great Financial Crisis.
Everything indicates, yes, it will be a process gradual on time and annoyed In terms of beneficiary customers, one of the big banks aggressive offer attract customers drag the rest of the industry. The increase in the fee of the liability, therefore only will partially alleviate the loss of purchasing power that a CPI causes households at the maximum level for decades.
As a tip, it should be noted that some smaller entities In recent weeks, Deutsche Bank, such as EBN, Pibank, Banco Pichincha and Renault Bank, has started offering interest-bearing deposits. Between 0.5% and 0.7% for a period of one to three years. To put it in perspective, the 19 main education services in the country, average 6.9% inflation 2.2% this year and the next, according to data compiled by Funcas.
Moreover, big banks continue on their way without taking a step and they do not plan to do this in the very short term. all eyes on him European Central Bank (ECB) and in the rhythm and intensity in which it was announced raise rate In addition to official interests, more answers than competitors will give rise to the said increase in the price of money. “Deposit rates will definitely start to rise in the second half of the year. everyone is waiting to see what the others are doing“, they manage to summarize in one of the main banks.
In fact, paying off debt is closely linked to the price of money set by the ECB. Inside July 2008At the start of the previous crisis, the response rate was 4.25% and Spanish organizations they paid 4.2% Average for all deposit balances to households and 4.7% for new deposits in the context of tight liquidity after the subprime mortgage boom in the previous year in the US. From then on, the monetary authority began to lower rates to save the monetary union of the euro, and as a result, the fee for bank savings collapsed.
The official interest rate has been 0% since March 2016. Also, since June 2014 ECB blames banks for keeping their money instead of paying it (the so-called deposit facility, which is currently -0.5%). As a result, average wage new family deposits below 0.1% Since October 2017 (0.04% last March), the average deposit rate for households has been below this level since February 2020. .
The ECB’s anti-inflation plans will change this scenario. The monetary authority has signaled that it plans to approve two increases in the deposit facility over the summer. 0% in September. Then the rate of intervention will begin to rise to a level that it can in principle reach. between 1% and 2% next yearhowever, this will depend on how the CPI develops in the euro area.
The first consequence of this change in strategy is that banks stop charging big companies for their debt. With the ECB’s deposit facility negative (above -0.5%), it costs organizations money to recover their customers’ savings. They did not pass this cost on to households and SMEs fear of losing them as users and not being popular but they’ve been doing this for years with big companies. “We’ll have to stop charging them when the deposit facility reaches 0%”, the CEO of one of the main banks confirms.
Then it will be time to start paying for retail deposits. But no major entity seems to be in a hurry. “We’ll do what you did CaixaBank“, reminding that the Catalan-based organization has the largest market share in Spain, pointing to one of its competitors. So what plans does CaixaBank have? “We will be last bank to pay for deposits,” said Javier Pano, its chief financial officer, a few weeks ago. The business plans to pay interest on 30-35% of its deposits and only pay them at the equivalent of 70% of the market interest rate. if euribor rises to 1.5% as expected in the medium term; If it stays below this level, the percentage of deposits it pays will be lower.
The only element today that seems likely to break this scenario for the next few months is that some major banks have decided to launch an aggressive extra fee deposits campaign, as Santander does occasionally. “I’m a deposit war If someone breaks the deck, but this time not for their liquidity needs, hook to attract customers‘ explains a senior executive.
“I don’t overlook a campaign if there is pressure to attract customers. Now we’re all focused on adding new customers, mortgageit will depend on how the market evolves”, adds another executive.