The remuneration of bank deposits in Spain is increasing and is getting closer and closer to the euro zone average, although it still remains at lower levels than those registered in neighboring countries, according to the latest calculations of the European Central Bank (ECB) , published yesterday.
In June, the average return on one-year deposits offered by Spanish banks was 2.22%, compared to an average of 2.73% in the euro zone. The difference is 18%, but three months earlier, in March, it was 35%, when Spain recorded a return of just 1.36%.
What has happened in the last three months is that interest rates have continued to rise from a marked 3.5% at the end of March and that banks have been forced to return most of the special loans granted by BCE during the pandemic, those known as TLTRO.
At the end of June, the deadline passed for the Spanish banks to liquidate 38,000 million of these grants. At that time, eurozone entities repaid a total of 477 billion euros, which reduced the ECB’s balance sheet by 6% and reduced liquidity in the system.
Spanish banks exceed the euro zone average in terms of liquidity and this reduces the urgency to collect money from clients. At the latest press conference to present half-yearly results, Santander’s CEO, Héctor Grisi, denied that deposits continue to be unpaid and gave the example of subsidiary Open Bank, which already pays more than 3.07% for these products.
“We do not think that the deposits will be repaid in the short term”, was instead the message of the CEO of BBVA, Onur Genç. His thesis is that there is still a lot of liquidity and that individuals are now more interested in devoting their savings to paying off their mortgage. Credit investment fell by 1.4% in the first semester.
The CEO of CaixaBank, Gonzalo Gortázar, assured in the bank’s latest results presentation that the entities are already offering “much more attractive” products than deposits. “It is not the best to limit savings to deposits”, he added.
Deposits have evolved more slowly than interest rates, which are already at rates of 4.25%. The banks also remember that this was not always the case and that when the price of money was negative, deposits did offer profitability, even if it was minimal.
The ECB data places Estonia, with 3.61%, and France, with 3.46%, as the countries that pay the most for deposits. In Germany, the average is 2.78%, while Slovenia, with 0.72%, is the country that pays them the worst.
The current yield contrasts with 0.22% a year ago, when the ECB restarted the policy of interest rate hikes. In October 2008, deposits reached an all-time high of 4.77%.
Spanish banks are, on the other hand, close to the euro zone average in the cost of loans. They demand interest of 3.75% from individuals, compared to 3.7% of the euro zone average, although lower than Germany’s 4%. In France, customers pay 3%.
