05/12/2012 07:31
Deposit rates remain stable despite pressures on the banking sector and uncertainty in the economic environment.
Instead of the easy solution to increase rates, the banks seem to resort to the offer flexible deposit products that give their customers the opportunity to withdraw their deposits in relatively short and regular periods.
They also offer the possibility of prepayment of interest to attract deposits of six months or one year.
The new European Central Bank data show that the Cypriot deposit rates are still at the top.
Despite shocks in the system, the interest rates for new deposits in Cyprus increased marginally to 4.45% from 4.43% in September and 4.15% in October 2011.
In Greece, the cost of absorbance of deposits increased to 4.62% against 4.59% in September and the Greek rates are the only rates to exceed the Cypriot.
In the euro area, the cost of absorbance of deposits stood at 2.75% from 2.80%.
High lending rates
Lending rates remain high despite the decline in credit growth to its lowest level in years. The difficult financial condition of households and the reluctance of banks do not lead to large lending exposures.
According to ECB figures, the interest rates of business loans in Cyprus remained at 6.50% in October – as in September – compared to 6.78% in October 2011.
In Greece, they dropped to 5.83% from 5.92%, while in the euro area they declined to 3.39% from 3.46%.
According to the figures, Cyprus has the highest rates across the eurozone for both business loans and mortgages.
The interest rates for housing loans in Cyprus fell in October to 5.47% from 5.54% in September and 5.61% in October 2011.
In the eurozone, mortgage rates fell to 3.42% from 3.45%.
The rate for new mortgage loans in Greece fell to 3.11% from 3.27%.
Instead of the easy solution to increase rates, the banks seem to resort to the offer flexible deposit products that give their customers the opportunity to withdraw their deposits in relatively short and regular periods.
They also offer the possibility of prepayment of interest to attract deposits of six months or one year.The new European Central Bank data show that the Cypriot deposit rates are still at the top.
Despite shocks in the system, the interest rates for new deposits in Cyprus increased marginally to 4.45% from 4.43% in September and 4.15% in October 2011.
In Greece, the cost of absorbance of deposits increased to 4.62% against 4.59% in September and the Greek rates are the only rates to exceed the Cypriot.
In the euro area, the cost of absorbance of deposits stood at 2.75% from 2.80%.
High lending rates
Lending rates remain high despite the decline in credit growth to its lowest level in years. The difficult financial condition of households and the reluctance of banks do not lead to large lending exposures.
According to ECB figures, the interest rates of business loans in Cyprus remained at 6.50% in October – as in September – compared to 6.78% in October 2011. In Greece, they dropped to 5.83% from 5.92%, while in the euro area they declined to 3.39% from 3.46%.
According to the figures, Cyprus has the highest rates across the eurozone for both business loans and mortgages.
The interest rates for housing loans in Cyprus fell in October to 5.47% from 5.54% in September and 5.61% in October 2011.
In the eurozone, mortgage rates fell to 3.42% from 3.45%.
The rate for new mortgage loans in Greece fell to 3.11% from 3.27%.
Related Articles
