After the sharp falls in the first half of 2023, with a clear flight towards Savings Certificates (CA), individuals once again left a large part of their savings in banks. In March, deposits registered an annual growth of 4.2%, “the highest variation since December 2022”, highlights the Bank of Portugal in the information released this Friday.
These applications grew more than double what was observed in February (2%) and well above the 0.3% seen in January, data from the (BdP) reveal.
O stock deposits by individuals in resident banks amounted to 182.2 billion euros in March, 800 million euros more than in the previous month, with term deposits registering an increase of 500 million euros.
The growth in deposits coincides with the reduction in new investments in CA, a consequence of the cut in their remuneration, but also with the increase in the interest rate on new term deposits.
In the case of CA, series F, the only one that has accepted new subscriptions since June last year, which has a base rate of 2.5% (maximum limit, which may vary downwards with the fall of the three-month Euribor), the amounts entered have been below redemptions, that is, with a negative net balance.
However, the remuneration on new deposits began to fall in January and February, this last month to 2.81%, a value that represents a drop of 0.27 percentage points compared to the maximum reached last year, of 3.08% ( December). The drop in the remuneration rate for these investments coincided with the beginning of a drop in Euribor rates, a reference for loans, although almost unchanged in recent months, fueled by the hope of a cut in the European Central Bank’s key rates.
In terms of credit, there continues to be a decrease in the total amount of mortgage loans, justified by the slowdown in new applications and some early repayments.
The total amount of credit to individuals grew by 0.4% compared to March 2023, a variation that occurs for the second consecutive month, and which is exclusively due to consumer loans, as housing credit decreased.
The balance of consumer loans reached 21.4 billion euros, 100 million euros more than in February, and 5.8% more compared to March 2023. In this area, there has been a strong increase in credits personal accounts (without specific purpose), but also for the purchase of cars and through credit cards and other bank overdrafts.
The mortgage loan “pie” was 99 billion euros, 200 million euros more than in February, which represents a decrease of 0.6% compared to the value recorded in March 2023.
The “peak” of the credit portfolio for home purchases occurred in December 2022, when it amounted to 100,301 million euros, starting a decline since then. The sharp rise in Euribor rates put a brake on loans and encouraged some families to prepay part or all of their loans. Along with the rise in the cost of money (Euribor rates, but also mixed and fixed rates), the high price of houses has also been an obstacle to purchases using credit.
Less credit to companies
In companies, there was a monthly increase in deposits, with the stock totaling 64 billion euros at the end of March, 1.2 billion euros more than in February 2024. The year-on-year variation was negative at 1.2%, but lower, however, than that seen in February (which had been 1.6%).
Credit to companies totaled 72.8 billion euros at the end of last month, with no changes compared to February. But, relative to the value recorded in March 2023, loans decreased by 0.8%.
BdP data show that, taking into account the size, loans granted to micro-enterprises grew in annual terms (4.2%), but in the remaining types (small, medium and large companies) they showed negative rates of change.
By sectors, credit from companies in industry and electricity and commerce, transport and accommodation recorded negative annual rates of change, of -3.0% and -2.6%. Conversely, the construction and real estate sector recorded a positive annual rate of change of 1.8%, still lower than that observed last February (2.1%).
