The annual growth in private deposits “accentuated” in February. The expression is from Banco de Portugal (BdP), noting that there was a positive annual variation of 0.3% in January to 2% in February. With this growth, seen for the second consecutive month, and which contrasts with the drop in Savings Certificates (CA), the stock deposits by individuals in resident banks increased by 900 million euros compared to January, to 181.4 billion euros (177.8 billion in February 2023).
February’s data contributes to the near recovery of the drop in deposits suffered in the first half of 2023, a good part of which was mobilized for CAs and the other for the early repayment of housing loans.
Between December 2022 (with the stock at around 182,438 million euros) and the end of May 2023 (around 173,668 million euros), banking institutions “lost” around 8.770 billion euros. But from the end of May 2023 (the cut in CA remuneration took place from June) until last February they have practically recovered that amount, more specifically around 7.730 billion euros.
And that recovery was made during a period in which there continued to be an increase in early repayments of housing loans.
The increase in deposits also comes at a time when banks began to reduce the interest rate on new deposits, following the fall in Euribor rates used in home and business loans. In January, and according to data from the banking supervisor, the average interest rate on new term deposits from individuals fell by 18 basis points (or 0.18 percentage points), falling from 3.08% (in December) to 2.08% (in December) 90% in the first month of the year. However, the interest rates on deposits made in February will only be released this Friday.
Contrary to what happened when interest rates on deposits were practically at zero, with many individuals leaving their money in demand deposits, the rise in interest rates, seen essentially over the last year, has led to greater demand for deposits in term. This explains why term deposits (which include deposits with an agreed term and deposits with advance notice) increased by 1.4 billion euros in February, according to data from the supervisor.
The annual rate of change recorded for household deposits in national banks was above the average rate for the euro area, which is happening for the first time since January 2023. In the euro area as a whole, household deposits grew, in terms annual, 1.3%, reveals the BdP.
Loans to individuals are also growing, but slightly. At the end of February, the total amount registered an annual growth of 0.1%, which has not happened since July 2023.
But the two main destinations for this credit registered different variations. The amount of housing loans totaled 98.7 billion euros in February, practically unchanged compared to January 2024, and decreasing by 1% compared to the same month in 2023.
In the opposite direction, consumer loans reached 21.3 billion euros, 100 million more than in January 2024, and 5.6% more compared to the same period last year.
On the corporate side, deposits decreased, in annual terms, for the fourth consecutive month (-1.7%), to 62.8 billion euros, but 300 million euros more than in January 2024. The annual variation it was lower than that recorded in the first month of the year, which was negative at 4.8%.
Loans to companies totaled 72.7 billion euros at the end of February 2024, 100 million euros more than at the end of January, but 0.8% below the value recorded in the same period last year.
