[ad_1]
MILAN (Reuters) – The average interest paid on 12-month deposits in Italy stood at 2.48% at the end of March, up from 2.36% in February, data showed, as banks slowly pass higher official interest rates on to depositors.
European banks have been slow in raising returns on cash deposited by retail customers but analysts expect competition to increase in the wake of recent banking failures in the United States and the forced takeover of Credit Suisse.
Data processed for Reuters by account comparison website ConfrontaConti.it showed an average 20,000 euro deposit as of March 30 would earn 370 euros in interest over a one-year period, up from 350 euros in February, a 5.8% increase.
The increase is 4% for a 18-month term deposit and just 1% for a six-month deposit.
After shielding retail customers from negative rates in recent years, Italian banks have tried to profit from the gap between ‘active’ rates charged on loans and those paid on deposits as the cost of credit started rising.
Passive interest rates which lenders pay to depositors typically rise with a lag compared to active ones.
The Bank of Italy warned in early February, before the market turmoil erupted, that such a lag could reduce more quickly than in the past, with banks’ funding costs rising faster than normal given the abruptness of the monetary policy tightening.
The Bank of Italy has also called on banks to revise deposit terms to increase benefits for customers as monetary policy normalises.
The threat of higher funding costs is bigger for specialist lenders than traditional commercial banks, with ConfrontaConti.it featuring term deposit offers mostly from challenger banks on its home page.
Banca AideXa, a digital lender specialising in small- and medium-sized enterprises (SMEs), ranked first with a 4.5% gross rate for a three-year deposit. ViviBanca followed with a 4.15% rate also over 36 months.
(Reporting by Valentina Za; Editing by Christina Fincher)
[ad_2]
Source link