Banks are literally hoarding since, according to official data, the difference between interest rates on deposits and interest rates on loans widened even more. And all this based on data from the Bank of Greece!
At a time when the country is crawling after keeping deposit rates almost non-existent, loan rates are constantly rising. So this gap opened even more in July according to official data.
Banks kept deposit rates unchanged while increasing loans, raising multiple questions about the policy in place.
Interest Rate Difference: 0.57% vs. 5.78%
According to Bank of Greece data in June 2024, the weighted average interest rate on new deposits remained almost unchanged at 0,57%, while the corresponding interest rate on new loans increased to 5,78%resulting in the interest rate spread between new deposits and loans increasing to 5,21% from 4,98% which was in May.
In more detail, the average weighted interest rate of all new deposits remained almost unchanged, compared to the previous month, at 0.57%.
In particular, the average interest rate on overnight deposits from households remained unchanged at 0.03%, while the corresponding interest rate on corporate deposits stood at 0.20% from 0.17% the previous month.
- The average interest rates of deposits with an agreed duration of up to 1 year from households and from businesses remained almost unchanged at 1.86% and 3.16% respectively.
- In the lending arm, its weighted average interest rate of new loans to households and businesses increased by 24 basis points (0.24%) and stood at 5,78%.
- In particular, the average interest rate of consumer loans without fixed term (category that includes credit card loans, open loans and current account overdrafts) decreased by 7 basis points and stood at 14,92%.
- The average interest rate of consumer loans with a specific term and variable interest rate increased by 12 basis points (0.12%) and stood at 12,23%, while the average interest rate on mortgage loans with a variable interest rate decreased by 26 basis points (0.26%) and stood at 4,70%.
- The average interest rate of business loans without a specific term decreased by 6 basis points to form at 6,61%. The corresponding interest rate on business loans also decreased by 6 basis points to 7.55%.
- The average interest rate of new business loans with a fixed term and floating rate remained almost unchanged at 5,41%. The average interest rate on fixed-term loans with a variable interest rate to small and medium-sized enterprises (SMEs) decreased by 29 basis points and stood at 5,88%.
Regarding the structure of interest rates in terms of the amount of the loan, it is noted that the average interest rate for loans up to 250,000 euros increased by 19 basis points to 5.95%, for loans from 250,001 to 1 million euros it decreased by 15 basis points and stood at 5.99%, while for loans over 1 million euros it increased by 12 basis points and stood at 5.37%.
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