A person stands on the bank of the River Thames during sunrise, with the City of London financial district in the background, in London, Britain, April 4, 2023. REUTERS/Henry Nicholls Acquire Licensing Rights
LONDON, Aug 29 (Reuters) – A majority of large European banks reported a fall in deposits over the year to June 2023 as customers shopped around for better savings deals, according to an analysis published by ratings agency S&P on Tuesday.
Two-thirds of the lenders included in the 24-bank sample shed deposits over the 12-month period to the end of June, with the biggest percentage falls at Sweden’s SEB (SEBa.ST) and Britain’s NatWest (NWG.L) – down 13% and 12% respectively.
European lenders have been reporting intensifying competition for savers’ cash in recent months, against a backdrop of rising benchmark interest rates across the continent as policymakers try to combat sticky inflation.
Major banks have faced criticism from politicians and regulators in several European markets including Britain for not raising savings rates as fast as the rates they charge on lending including mortgages.
Over the 12-month period, deposits fell across all the markets sampled by S&P, with Spain suffering the biggest drop of 9%. The declines reflected customers choosing higher-yielding products and paying down expensive debts, the agency said.
However, many lenders arrested the trend somewhat in the April-June quarter, with 18 of the banks in the S&P analysis reporting a quarter-on-quarter increase in deposits.
Reporting by Iain Withers, Editing by Conor Humphries
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