The low remuneration of deposits saves Spanish banks 1,500 million
Spanish banks offer lower remuneration for savings than their European competitors. In this way, national entities almost 1,500 million euros are savedwith respect to other banks in the euro area, according to calculations by Europa Press based on statistics from the European Central Bank (ECB).
Specifically, the households stop receiving 924.16 million euros as Spanish entities have lower interest rates on liabilities than their European peers. The societies non-financial companies stop obtaining a remuneration of 547.97 million of euros.
Based on data for the month of February
The total saving (1,472.13 million euros) has been obtained by calculating the interest rate differentials of the entities of Spain and the euro zone for the month of February, taking as a reference the liabilities in the balance sheet for that same month. As both deposits and interest fluctuate each month of the year, the amount saved by Spanish entities may vary throughout the year.
According to ECB data, Spanish households had 925.5 billion euros in demand deposits in the second month of the year. The lower remuneration in Spain (0.08%) compared to Europe (0.12%) means that Spanish families dstop receiving 370.2 million of euros. Much higher are the spreads on time deposits. In deposits up to two years, Spanish entities offer an interest rate of 0.30%, while European ones offer 1.07%. Given that Spanish families had 60,000 million in this type of savings product, the lower remuneration of the banks in Spain implies that households received 462 million less in remuneration
With regard to deposits with a term of more than two years, households had 7,600 million parked, which in Spain are being remunerated at 0.51%, while in Europe the interest offered is 1.72%. This differential implies a remuneration in Spain that is 91.96 million euros lower.
The difference in savings remuneration was one of the issues analyzed by the experts at Alvarez & Marsal last week, when they published their annual report ‘The pulse of the bank’. In his opinion, “sooner or later” interest offered to customers will have to rise and transfer to deposits the rise in interest rates.
In fact, the senior director of the consultancy, Eduardo Areilza, considered that this situation of low remuneration could lead to reputational risks for entities. Not only because they offer low remuneration in a context of high inflation and interest rates, but also because entities have been marketing investment funds to clients who were looking for a certain remuneration for their savings for some time. And these types of products, unlike deposits, can incur losses.
In the case of non-financial companies, the remuneration of liabilities has lower differentials compared to Europe, but even so the average interest rate offered in Spain is lower than in the rest of the euro area.
Also, according to ECB data consulted by Europa Press, non-financial corporations had 269,100 million euros in sight deposits in February, with a remuneration of 0.15% in Spain. If these funds were applied the average interest rate in Europe (0.31%)Spanish companies would obtain 430.56 million euros more.
In the case of deposits with a term of less than two years, in Spain they are remunerated with 1.67%, compared to 1.94% from Europe in February. Given that in that month the Spanish companies had 38,800 million euros parked in this type of product, this represents a negative differential of 109.76 million euros.
At the end of February, non-financial corporations also had 4,500 million in deposits with a maturity period of more than two years. In this case they stopped receiving only 7.65 million euros, since in Spain the remuneration is 1.49%, compared to the 1.66% average in the euro zone.