Banks, curiosity margin on the prime. Prometeia: a decline anticipated in 2024 | EUROtoday

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The sensational leap in banks' curiosity margins in 2023 is there for all to see: +45% is the common enhance in revenues generated by establishments from one yr to the following due to lending exercise. What now stays to be understood is how 2024 will go. Because whether it is true that the drop in charges could possibly be gradual to seem, thus prolonging the celebration for intermediaries, additionally it is true that funding could possibly be affected by a rise in costs, thus lowering the hole of earnings. With what ultimate outcomes?

The banks, to inform the reality, haven’t any doubts: 2024 will nonetheless be characterised by a prime curiosity margin, even admitting that the second half of the yr, as anticipated, brings with it a contraction in rates of interest curiosity. As introduced by the bankers within the spherical of presentation of the 2023 accounts, on the finish of the yr the web curiosity margin on common is anticipated to be in line and even above that of 2023. Thanks, the banks underline, to a hedging exercise that has already begun efficiently and which can permit you to defend your self from the inversion of the rate of interest curve. And additionally a capability (unquestionable, to this point) to maintain the rise in funding prices to a minimal, significantly on the retail entrance, limiting the remuneration of deposits as a lot as attainable.

Alarm bell

However, it’s the consultancy agency Prometeia that rings the alarm bell and curbs the passion of the banks. Which, somewhat in opposition to the tide, places much less bullish forecasts on paper, thus inviting warning. «Net of the rate of interest hedging measures by the banks, we estimate that 2024 will see a decline within the curiosity margin of seven% in comparison with 2023 – explains Lea Zicchino, senior companion liable for analyzes of markets and intermediaries – as a result of what is going to change would be the construction of the composition of the gathering”.

Much is due to what, according to the consultancy firm, promises to be a progressive and inevitable outflow of deposits towards other, better-paid areas. It must be said that up to now Italian banks, in line with other European banks, have in fact kept the level of remuneration of liquidity on current accounts low, which «only partially and only in the first part of 2023 has flowed towards other forms of investment ». This trend, according to intermediaries, should not change during 2024: if retail customers did not actually run away from current accounts when rates were rising sharply, bankers reason, it is not clear why things should change when rates they will start to go down.

Escape from bank accounts

In Prometeia's projections, however, between now and 2026 the flight from current accounts will be significant: outflows of around 240 billion are expected, 100 of which will end up in time deposits, such as time deposit accounts, whose weight on the total collection in forecasts will increase from the current 7 to 12 percent. Part of the missing collection will then have to be replaced “with extra points and at larger prices on common”, a lot in order that the forecast is for a rise within the bond element from 11 to 14% in whole, due to new points for 50 billion. «And then the banks should take care of the competitors from authorities bonds, on condition that public debt is anticipated to develop and should be financed not directly additionally by the financial savings of Italians».