The Bank of Spain makes ugly the sector that does not pay more for deposits

The Bank of Spain makes ugly the sector that does not pay more for deposits

2023-05-30 14:43:15

The Bank of Spain once again slaps the financial sector on the wrist for skimping on resources with its customers’ deposits. The supervisor has been warning for some time that the banks are not transferring the more restrictive monetary policy to an improvement in the remuneration of savings. A reality that is especially noticeable in large entities, compared to the higher interest already paid by smaller or digital banks, which in some cases reach 3%.

In an article in the Financial Stability Magazine published yesterday, the agency calculates that, of all the cumulative rise in 2022 for the twelve-month Euribor, entities have only transferred 0.7% and 2.3% to rates of interest on sight accounts of households and companies, respectively.

However, a certain transfer has been detected from these remunerated accounts –in which interests have stagnated at 0.08%– towards one-year deposits, where profitability has risen somewhat more, to stand at 1, 36% in March.

However, in longer terms (over 12 months), the returns offered fell again in March compared to February. And Spain is still at the tail of the euro zone in these terms. Specifically, the average for new time deposits in the euro zone stood at 2.11% in March, according to ECB data. A figure notably higher than the 0.2% that they presented before the start of the interest rate rises.

Savings of 3,250 million

In his analysis, the supervisor notes that the transfer of the Euribor to deposits has been “much more limited than would have been expected” based on what happened in other interest rate rise cycles. In fact, they carry out a simulation to determine, taking these other historical moments into account, that the sector would have saved some 3,250 million euros last year by not updating the cost of its deposits.

For the organism, the high levels of liquidity of the banks are behind it is immobility. In other words, now they do not need to capture as much savings as on other occasions, so the liability war is limited to products that are more profitable for entities, such as investment funds or insurance, for which they charge higher commissions than with a conservative deposit.

The problem is that this trade policy contrasts with that applied to credits. All you have to do is take a look at the behavior of mortgages where, according to INE statistics, the average interest rate at the beginning of the loan is already close to 3%, from 1.9% in the summer of 2022.

It was then that the European Central Bank (ECB) decided to start raising interest rates to fight inflation, taking the reference rate from 0% to the current 3.75%. The movement was immediately reflected in the rise of the Euribor, to which most mortgages in Spain are referenced, and which is dangerously close to the 4% barrier compared to the negative rates at which it traded just over a year ago. anus.

Given this scenario, the Bank of Spain considers that the implementation of this evolution of the Euribor could begin to gain momentum from now on and the differences between what each bank offers “will appear”. But the entities have already made it clear that they will not make a move until the competition does. And, for the moment, nobody points to next movements.

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