Latest ECB Figures show Corporates are Losing from Interest Rate Rises
The new ECB statistics provide further confirmation that Euro-zone banks are not passing on the benefits of higher interest yields to their customers. European companies are falling behind. The effective interest rate on overnight corporate deposits for December 2022 has climbed to a paltry 0.09% despite the ECB rate rising to 2%.
The figures show that term deposit rates for new deposits from corporations are improving but that hides a very poor return from existing term deposits. With most corporates achieving no return on current account funds, the opportunity cost of bank funds is growing. The lesson for Finance Leaders is to pay much more attention to banking relationships to ensure that with the huge interest rate changes – they continue to be fit for purpose. Many corporates are using Bankhawk’s Banking Optimisation Benchmarking to optimise their banking relationships and the return on their cash.
ECB December 2022 Statistics Summary
- Composite cost-of-borrowing indicator for new loans to corporations increased by 30 basis points to 3.41%, driven by interest rate effect
- Composite interest rate for new deposits with an agreed maturity from corporations increased by 31 basis points to 1.83% in December 2022, driven by the interest rate effect.
- Interest rate for overnight deposits from corporations increased by 4 basis points to 0.19%, driven by the interest rate effect.
Source:
https://www.ecb.europa.eu/press/pr/stats/mfi/html/ecb.mir2212~4e7d08f6a5.en.html
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