By Leonidas Stergiou
In addition to the decline in net savings in January, which is a traditional phenomenon as a December deflation, banks are finding clear signs of fatigue in the savings rate of households, especially younger people, due to high energy bills and generally inaccurate and in the official data of February that will be officially announced by the Bank of Greece.
At the same time, there is a large flow of transfers of deposits and wealth from older to younger ages, which intensified mainly in the last months of last year with transfers and tax-free parental benefits. Mortgage and consumer credit has revived after years of decline and has run for the last three years at an annual rate of 30% and with total new disbursements in 2021 at 1.2 billion euros, when this amount, a few decades ago corresponded to loans one or two months. This, in combination with the granting of new loans with a contribution mainly from parents, but also from the recent transfers of assets, showed in the most obvious way the low disposable income, mainly of the younger ones. Income taxes, ENFIA and expensive energy tariffs in January and February were recorded in bank accounts.
On the other hand, companies maintain their liquidity growth (those they have) almost at a steady pace, without, however, investing.
These are the main conclusions of the bank executives in charge of deposits and retail loans from the first indications from January until today and from the beginning of the war in Ukraine. According to the same banking sources, only inflation, accuracy, high energy tariffs and uncertainty from geopolitical developments are enough causes to be observed at the same time fatigue in deposits, postponement of investment plans and reduction in demand for loans.
Bank executives estimate that the duration and extent of the impact will depend on the duration of the war and the price increases in energy and the cost of moving to other products. The optimistic scenario envisions offsetting the negative impact on disposable income and liquidity from tourism, although it is expected to be adversely affected by Russian tourists.
The official figures are indicative:
Net corporate savings were down 2.4 billion euros in January, compared with a net increase of 2.3 billion in December. The corresponding net decrease in household savings was 447 million euros in January, compared to an increase of 2.7 billion euros in December. The changes in January are attributed to the traditional “deflation” of the accounts after December, but also to the payments of income taxes of legal entities and individuals, ENFIA and VAT. Net savings, mainly from households is fatigue mainly due to high bills from accuracy and mainly from energy.
Household deposit balances may have risen 15 billion since the start of the pandemic and reached a 20-year high (135 billion), but are still 71 billion euros (196 billion) lower than in December 2019. .
New mortgage disbursements may have started at the level of 250 million euros three years ago and reached 1 billion in 2021, but this level corresponds to one-month loans in 2007 or 15 days in 2016.
Corporate deposits may have risen more than $ 10 billion since the pandemic and were backed by significant support packages, but total deposits (not all on a case-by-case basis) are at a record high (€ 39 billion), following a steady upward trend. course that started in June 2015 (16 billion), without being converted into investments of equivalent value. The current amount of deposits has reached and marginally exceeded the maximum levels since 2020 and in the period before the 10-year crisis and the flight of deposits.
The unofficial data, which the banks believe will be reflected in the coming months if revaluations and geopolitical developments continue, include the following:
1. Mortgages from newer general with almost exclusive condition the contribution of the older generation. That is, the transfer of wealth from the ages 65-68 + to 25 and over, which was intense in the fourth quarter of 2021, will continue in 2022.
2. Reduction of expenditures, due to reduction of disposable income, with consequent contraction of the savings rate that had appeared since the beginning of the pandemic due to the support measures.
3. Withdrawal of support measures (allowances, refunds, moratoriums, Bridges, Co-operation, etc.) has already appeared on deposits and the market, although all programs have not yet expired.
4. Bell in the banking systems for the possibility of creating new red loans, mainly in consumer credit, due to accuracy and reduction of disposable income – especially if the crisis lasts – although there are no such precursors yet.
Source: Capital
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