Domestic deposits of the five largest institutions operating in the country shrank 3.4% in the year to June. While Santander led the flight, BCP was the only one to strengthen its coffers.
The main banks operating in the country lost more than 7.4 billion euros in savings of families and companies until June compared to the same period last year. According to calculations made by Dinheiro Vivo, BPI, Caixa Geral de Depósitos (CGD), Millennium BCP, Novo Banco and Santander totaled 212.8 billion in domestic deposits at the end of the first half of this year, which represents a decrease of 3.4% compared to 220.3 billion in the same period last year, that is, 7449 million euros less.
Among the five financial institutions, Santander Totta lost the most, with deposits shrinking from €40.1 billion in June 2022 to €36.5 billion at the end of the first six months, a drop of 8.8% or €3.5 billion, which the bank associates with the “early repayment of credit by customers” and the “diversification of resources”. BPI, whose stock of savings fell by almost 4.4% to €28.6 billion, came second in the percentage table, with €1.3 billion less in its portfolio, despite the growth recorded in the second quarter of the year.
Caixa Geral de Depósitos saw almost €2.5 billion leave its coffers in the space of a year. After experiencing a year-on-year decrease of almost 3.5%, the savings of companies and families kept in the public bank, led by Paulo Macedo, totaled 68.8 billion. Novo Banco, although it also saw a reduction in deposits, recorded less damage compared to peers, with the amount lost since then amounting to €166 million (-0.6%), to €28.2 billion. In fact, in the second quarter, Lone Star’s bank reversed the trend, posting a 2.5% increase in deposits.
Outside the loss accounts – unlike the other banks – Millennium BCP accumulated savings in the period under review, with deposits in national territory being reinforced with 500 million euros, totaling 50.58 billion. Compared to the stock of 50.53 million euros in June of the previous year, this means a slight improvement of 0.09%, although, according to the bank’s CEO, Miguel Maya, more than 200 million euros were repaid in loans granted for home purchases.
Certificates, redemptions and low interest on deposits
The bet on savings certificates, which until month six raised about 33.2 billion euros, as well as the partial early repayments of housing loans, which in May already exceeded 3.7 billion, according to data from Banco de Portugal (BdP), can help explain the flight. But the low return on deposits was another factor.
National banks remain at the tail end of Europe, having paid, in the fifth month of 2023, the fourth lowest interest rate on individual deposits (1.26%) in the euro area, surpassing only Croatia, Slovenia and Cyprus. In the case of companies, the interest paid was 2.37%, while the average of the 20 countries stood at 2.95%.
Speaking to Dinheiro Vivo, André Pedro, director of Comparajá, says that “the most competitive rates are, as a rule, in the less known and reputable banks”, although “there is no real reason to explain it”. Now, given that it is the large institutions that have the largest market share, this helps to explain the interest rate levels on private deposits in Portugal.
How much does €5,000 earn at the big banks?
The comparator of financial products and services made a simulation for a term deposit of five thousand euros to one year in the five banks, at the request of the newspaper, and concluded that the most attractive remuneration is 3%, in Caixa Geral de Depósitos and BPI, with possible gains settling at 109.5 euros, while the lowest rates are in Millennium BCP (2.75%) and Novo Banco (1.5%, but for a six-month deposit), with possible gains on the amount applied of 99 euros and 27 euros, respectively. According to ComparaJá, Santander has no offer that fits those requirements.
The director of the company – which is also a credit intermediary – points out, however, that “term deposits are a highly dynamic market with very specific constraints” and that, although the rate is always the main indicator to take into account when evaluating the offer inherent in term deposits themselves”, “it is as or more important to take into account the factors that make it up, namely the term, the amount the possibility of mobilization, the money invested or even the capitalization of interest”.
