2023-08-20 06:30:58
The piggy banks of Girona families and companies are starting to thin. The increase in expenses resulting from inflation, the need to pay off mortgages to avoid the increase in the monthly fee or the search for alternatives that provide more profitability have in recent months caused a considerable reduction in the money that residents in the province they keep the financial institutions.
If at the end of last summer the volume of deposits that Girona residents had in banks reached 16,486 million eurosonly nine months later, at the end of March, the figure had suffered a decrease to 15,987. In other words, 500 million less, according to the latest official balance sheet of the Bank of Spain. Despite the drop, this amount is the third highest in the city’s history, surpassed only by the months of September and December last year.
A trend that is also repeated in Spain, with a drop of more than 37,000 million in the country as a whole during the same periodcoinciding with the highest increases in the CPI and the acceleration of the rise in the Euribor to try to contain them, according to the same sources.
However, another significant percentage would be used to repay debts and, specifically, mortgages, with the aim of mitigating the impact of the rise in the Euribor on the monthly fee, as Miquel Riera points out , from the HelpMyCash portal, and also confirms the latest data from the Bank of Spain itself, which includes they indicate an acceleration of this phenomenon in the coming months.
Thus, a recent report by the supervisor pointed out that many families would be taking advantage for this purpose of the extra savings that were generated during the pandemic – when confinement reduced spending outside the home – and numbered around 100,000 million in the cushion which, above all those households with medium-high and high incomes, had managed to generate throughout Spain.
In the case of companies, these have also seen their portfolios lighten. If at the end of last summer Girona companies had deposited 702 million, six months later, the figure is reduced by 100 million, decreasing to 602 million in the month of May this year.
Less debt
The positive part is that, at the same time that savings have fallen, so has debt, even more strongly. In this way, the outstanding balance of the province’s credits – that is, the total volume of euros that individuals and companies owe at any given time to financial institutions – has been reduced, in one year, to 300 million euros, up to 13.8 billion.
A decrease that can be explained by the amortizations mentioned above and also by the lower demand for new credits. It should be remembered that the contracting of new mortgages has fallen by more than 20%, according to the latest data from the INE, from last May. Similarly, companies also seem to have parked all their investment projects, since while requests for financing are circulating, medium and long-term credits remain at unusually low levels, as recognized by the entities themselves. In fact, the European Central Bank itself estimated a few weeks ago that the demand for business financing had fallen by 42% in the eurozone as a whole during the second quarter, before the rise in interest rates.
To all of the above, it must be added that citizens are also withdrawing money from their accounts to allocate them to other, more profitable alternatives, given the refusal of the big banks to improve the remuneration of deposits, as Riera points out . Thus, the expert cites the increase in purchase requests that have been registered in the last Treasury Bill auctions and also the greater attraction of investment funds.
In this regard, it should be noted that, although the vast majority of money that Girona residents have in banks is still in current accounts -14,664 million-. This is due to an increase in the volume of term deposits that Riera attributes to the offers that are being carried out by small entities to capture the market, since the large ones remain closed because they do not need liquidity at the moment.
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