The rise in interest rates has already caused a sharp increase in the Euribor and a fever for Treasury bills, but it has not yet reached the product par excellence for any saver: deposits. There is still no liability war between the big banks, nor is it expected, but the first skirmishes between the smaller entities have begun to emerge. Some neobanks and small financial firms have begun to launch deposit offers and the forecast is that the large banks will follow suit as of June, when they have repaid the advantageous loans granted by the ECB during the pandemic.
The most attractive offers do not come from any big bank at the moment. EBN Banco gives an APR of 2.35%, compared to 2.3% for Wizink, 2.01% for Pibank or 2% for entities such as Mediolanum, Banca March through its subsidiary Avantio or Targobank, according to online comparators who track these products on a daily basis.
These entities make their way in a commercial battle that is taking different forms. Among the large ones, commercial actions have been oriented towards attracting payroll accounts. CaixaBank has launched an offer of 5% APR for the first 5,000 euros of balance for two years and Sabadell has done the same with an online account in which it gives 2% for its opening. There are other cases, also of investment funds, but the position of the big banks is waiting for the moment.
Banks and all observers agree that deposit remuneration is a matter of time. In its latest financial stability report, the Bank of Spain already warns of the cause of this slowness when transferring rate hikes to savings: "The scant response of the remuneration of deposits could be linked, to a large extent, with the broad liquidity". For some years, he adds, interest rates have been negative, while deposits have always remained positive, even if at minimal levels.
The expression "ample liquidity" is the Bank of Spain's way of saying that banks still do not need to reward savers. In their latest results presentations, the large banks agreed in describing the moment as "normalization" after several years with negative interest rates in which their profitability had been against the ropes. "It is not on the table" to make deposits attractive, said the CEO of BBVA, Onur Genç. "It will be done at some point," said Ana Botín, president of Santander. The increases will end up coming, predicted the CEO of CaixaBank, Gonzalo Gortázar.
From the consultancy Accuracy they calculate that the deposits of the big banks have barely increased their profitability by 0.2 points. "Big changes in remuneration are not expected at least until June 2023," they say. "Spanish banks continue to enjoy a large volume of liquidity, even after having used much of their cash to increase business."
According to data from the Bank of Spain, the average remuneration on deposits stood at barely 0.7% in January, compared to the 3.33% annual average for the Euribor.
Banking sources point to a factor that, as of June, may cause a change of scenery. It is called TLTRO long-term financing operations, which are the loans that the ECB granted to banks in excellent conditions during the pandemic. This financial support will end in June, when the banks return the credit, at which point they will look for money elsewhere and begin to encourage the deposit market. Interest rates will also continue to grow, with forecasts to reach between 3.5% and 3.75% before the end of the year.
Among the large banks with the most commercial arrivals, the one credited with the greatest aggressiveness in this type of offer is ING, which is the only foreign bank among the main ones in Spain. "We once again have options to give back to our clients and have a positive margin," said its CEO in Spain, Ignacio Juliá, a few days ago. He did not report the launch of any new product, but he did point out that the bank "will adapt its offer to the environment and the market."
