The "choice not to choose", that is the tendency of Italians to leave theirs liquid assets property on current accounts in the past months, could be at a turnaround. Thanks to the observation that galloping inflation is now eroding capital, but also a greater openness to donate Loans from the banks, who in turn breathe a sigh of relief seeing the decrease sufferings. A virtuous circle that could recur after it had jammed since the beginning of the crisis triggered by Lehman Brothers in 2008, which had repercussions in Italy since 2015 to which the pandemic was added. The data emerges from the latest monthly report of theItalian Banking Association (ABI).
The enormous mass of liquidity left in current accounts is reduced
In the first place, the report shows how Italians are perhaps realizing that leaving savings in current accounts means make them erode by inflation, and they started investing. In December it turns out that the liquid assets decreased on an annual basis by 24,1 billion euro to 1.835,4 billion (-1,3%). Of course, compared to the previous month it is increasing, but there is another figure that could indicate a change in trend: after a decade (since 2012) with the minus sign, investments in bank bonds they remained unchanged on a year-on-year basis and grew in December by 1,7 billion to 209 billion compared to the previous month.
The reduction in deposits, says the association led by Antonio Patuelli, is imputable mainly to businesses (-33,4 billion euros between July and November 2022) which they had recorded during the pandemic period (between December 2019 and July 2022) an increase in deposits of over 130 billion euros.
Instead, for the indirect collection, i.e. investments in securities held with banks (both managed and held directly by customers) there was a much greater increase of approximately 82 billion between July and November 2022, of which 56,7 billion attributable to households, 7 to companies and the remainder to other sectors (financial companies, insurance companies, public administration).
Another sign of the shift from the current account to the investment comes from the huge demand that is occurring for the Eni bond aimed at retail customers, which has already exceeded 2 billion.
How much a rate yields on deposits and how much on bonds
After all, the world of interest rates has changed since last summer, when the ECB started his monetary tightening. And albeit very slowly, banks are starting to offer a little more yield on their bonds than on deposits.
Il average rate on the total of bank deposits from customers (sum of deposits, bonds and repurchase agreements in euro to households and non-financial companies) last month was 0,62%, (0,58% in the previous month) with an average of deposits (current accounts, savings and certificates of deposit 0,46% from 0,42% in the previous month and the repurchase agreement rate stands at 0,92% from 1,67% the previous month. Instead the bond yield outstanding rose to 2,12% from 2,07% in the previous month.
But interest rates on loans are growing much more
The demand for is growing again Loans: those to businesses and households in December increased by 2,1% over a year ago. In November 2022, for loans to companies there is an increase of 2,8% on an annual basis. The increase is 3,8% for loans to families.
But loans have a cost. The average rate out of total loans is equal to 3,22% up from 2,96% in the previous month and from 6,18% before the crisis, at the end of 2007. The average rate on new financing operations to businesses is equal to 3,44% from 2,94% in the previous month and from 5,48% at the end of 2007, while the average rate on new business for house purchase is 3,09% from 3,06% in the previous month and from 5,72% at the end of 2007. The spread between the average rate on loans and the average rate on funding from households and non-financial companies, in Italy in December 2022 it was equal to 260 basis points (238 in the previous month), lower than the more than 300 basis points before the financial crisis ( 335 basis points at the end of 2007).
Improve credit quality
The report shows that the net suffering (i.e. net of the write-downs and provisions already made by the banks with their own resources) amounted to 16,3 billion euro in November, slightly declining (about 350 million) compared to the previous month (-2,1%) and approximately €1,3 billion lower than in November 2021. Compared to the maximum level of net non-performing loans, reached in November 2015 (88,8 billion), the drop is €72,6 billion. The ratio of net non-performing loans to total loans was 0,92% in November compared to 1,02% in November 2021 (4,89% in November 2015).
