In the first half of 2010, while the Euribor was at just over 1.2%, Spanish banks remunerated their clients' deposits with 4 or 4.5% interest. Today zero is still being paid for the liabilities of savers while the Euribor is on track to close this August at around 1.2%.
Banking sources maintain that those wars over liabilities will not return even if interest rates in Europe soar. At that time, in the midst of the real estate crisis, the balance sheets of Spanish banks were unbalanced as assets (credits or loans) had a greater weight than liabilities. For this reason, the entities subsidized the deposits to capture liquidity. Now the situation is not the same.
If interest rates continue to rise, Spanish banks will have to remunerate their clients' deposits, but the sector warns savers not to expect large payments. A reflection of what can happen is what is happening now in the UK. There the interest rates are at 1.75% and, on the other hand, the remuneration of customer deposits is below 0.5%. The guide that the ECB and its president, Christine Lagarde, have hinted at is that official interest rates would rise to 1% in September and could go higher in the short term as a strategy to curb the rise in inflation.
Banking sources explain that the impact of the expectation of rate hikes on liabilities is less than on assets because "financial institutions are in an optimal liquidity situation derived from the expansionary monetary policy of the European Central Bank in recent years" . The scenario of increases occurs at a time when "regulation since the last credit crisis has tightened and has required entities to have higher levels of liquidity to deal with possible crises and capital flight."
Xavier Vives, a professor at IESE, recalls that "the results of the banks have been good and the entities are in a better situation as they have greater control that comes from outside." It was one of the reflections that emerged at the annual conference of the EFA (European Finance Association) held last week in Barcelona.
"I think that the remuneration will now start to go up," adds Vives. The truth is that today the only one of the large Spanish banks that seems to have made a move is Sabadell, with an online account that pays up to 2% on the first 30,000 euros. Bank sources clarify that in reality it is not a movement to attract liabilities, but to gain clients, since the remuneration is limited to 30,000 euros and to people without links with Sabadell.
If there are new offers of remuneration of savings in the future, they will be in that line. "It is possible that there are movements, but not because of a need to obtain financing from the entities, but to attract new clients", they explain from the sector.
The bank insists that "conservative savers can already benefit from the increases in rates through interest-bearing accounts that are already on the market and it is most likely that more will continue to emerge." And they clarify that "they can also invest in public debt or private fixed income directly or through investment funds, or even in liquidity funds".
In fact, in recent years the sector has managed to transfer the classic investment in deposits, which is risk-free, to off-balance-sheet products, such as mutual funds, which allow entities to pay management fees even if they generate losses.
