Banks have barely transferred a third of the rise in rates to deposits

Spanish banks have barely transferred 29% of the increase in interest rates carried out by the European Central Bank (ECB) to household deposits. This was stated by the deputy governor of the Bank of Spain, Margarita Delgado, in her speech at a conference organized by the Spanish Banking Association (AEB). It must be remembered that the body chaired by Christine Lagarde began to raise the official price of money in July 2022 to reach 4.5% in the last meeting held in October. On the other hand, the average interest rate on new deposits stood at 2.3% in September, according to the Bank of Spain itself.

“Thus, in Spain we have observed that while the transfer has been approximately 50% in loans for home purchases and credit to companies,” said Delgado in his speech, while “in the case of deposits, the “The transfer has been only 29% for fixed-term deposits from households and 45% for companies.”

The deputy governor has also stated that there are differences between term deposits, whose transfer “is very low today” compared to demand deposits, where the rate increase has barely been transferred. However, it is expected that this situation will be reversed. For this reason, “it is to be expected that the margin increases seen recently will not be sustainable over time.”