Barring surprises, bank deposits will go through the current cycle of interest rate increases without pain or glory. Its profitability will have experienced a late rise at the end of 2022, reached a discrete maximum in 2023 and began the declines in 2024 in advance, before the ECB begins to reduce interest rates in June, according to the forecasts of the analysts.
The remuneration of bank deposits has been declining for three months and is already at the levels of September of last year, at 2.36%, according to the latest data from the Bank of Spain, corresponding to February. It is a percentage increasingly further away from the 2.6% reached in November 2023 and, of course, a much lower reference to inflation, 3.2% in March.
There are exceptions among neobanks and smaller entities, but returns in Spain are 34% below the euro zone average, 3.17%, according to ECB data. Among the main economies, Italy registers 3.7%, France 3.6% and Germany 3.2%.
The low remuneration of deposits has deserved comment apart from the vice president of the ECB, Luis de Guindos, who has repeatedly insisted that rate increases “are for everyone.” The Minister of Economy, Carlos Body, has explained these days that the Government has also asked the CNMC to analyze whether there is effective competition in deposits.
The banking sources consulted offer four arguments. The first: when the ECB rates were negative, the banks were already giving something, although little, for deposits. The second: deposits yield less than in the euro zone, but mortgage loans are also lower, in no case at the level of 4.5% interest rates. The third: there is still enormous liquidity in the system despite the repayment of special loans from the pandemic, so that banks have no need to raise resources from individuals. And the fourth: Spaniards tend to leave money in checking accounts rather than retaining it in deposits. In other words, they already keep the money in the bank, and the entity has no incentive to remunerate it.
So far this year, Spanish households have transferred nearly 28 billion euros from current accounts to one-year deposits, according to data from the Bank of Spain. It is the highest pace since 2017 and it responds, according to reports from S
The Bank of Spain estimates that Spanish households now have 856,890 million euros in current accounts and 142,250 million in term deposits, when at the beginning of 2023 they had 928,375 million euros at sight and 65,473 million in term deposits. While they increase, at least discreetly, the profitability of their money, households now have the lowest debt since 2006, of about 452,000 million.
