(Finance) – Market rates have decreased since October 2023. In recent weeks, this downward trend has continued following the reductions in ECB rates and also anticipating further decisions by the ECB. In the first 14 days of November the 3-month Euribor rate averaged 3.04% (3.17% was the average in October), a decrease of 13 basis points compared to October 2024. The decrease was 96 basis points compared to the maximum value recorded in October 2023. The six-month BOT rate averaged 2.95% (2.99% in October), down 4 basis points. The drop was 110 basis points compared to the maximum value recorded in October 2023. The 10-year IRS rate (widely used in mortgages) was on average 2.39% (2.43% in October) with a further decrease of 4 basis points. The decrease was 114 basis points compared to the maximum value recorded in October 2023. The 10-year BTP rate averaged 3.66% (3.51% in October), an increase of 15 basis points. The decrease is 133 basis points compared to the maximum value recorded in October 2023. This is what emerges from Abi report of November 2024.
INTEREST RATES ON BANK LOANS
In October 2024 the average rate on new business financing operations decreased to 4.60% compared to 4.90% in September 2024 and 5.45% in December 2023; the average rate on new transactions for home purchases decreased to 3.28%, compared to 3.31% in September 2024 and down compared to 4.42% in December 2023; the average rate on total loans (therefore subscribed over the years) has fallen
to 4.61% from 4.70% in the previous month.
INTEREST RATES ON BANK FUNDING
The rate charged on new fixed-term deposits (i.e. certificates of deposit and time deposits) in October 2024 was 3.14%. In September 2024, this rate was higher in Italy than the euro area average (Italy 3.35%; euro area 3.17%). Compared to June 2022, (last month before the ECB rate hikes) when the rate was 0.29%, the increase was 285 basis points.
The yield on new issues of fixed-rate bank bonds in October 2024 was 3.83%, an increase of 252 basis points compared to June 2022 when it was 1.31%. In October 2024 the average rate on total deposits (certificates of deposit,
savings deposits and current accounts), was 0.96% (0.99% in the previous month; 0.32% in June 2022).
The rate on current account deposits alone is 0.48% (0.52% in the previous month; 0.02% in June 2022), keeping in mind that the current account does not have an investment function and allows you to use a multitude of services.
MARGIN BETWEEN LOAN RATE AND COLLECTION RATE
The margin (spread) on new operations (difference between rates on new loans and new funding) with households and non-financial companies in October 2024 fell to 159 basis points (191 points in the previous month).
QUANTITY OF COLLECTIONS FROM CUSTOMER
Indirect collection, i.e. investments in securities held in banks, shows an increase of approximately 208 billion between September 2023 and September 2024 (84.4 billion families, 15.4 billion businesses and the remainder to other sectors, financial companies, insurance , public administration). In October 2024, medium and long-term funding, through bonds, grew by 8.7% compared to a year ago (+9.6% in the previous month). Deposits alone, in various forms, grew by 2.4% in October 2024
annual basis (+0.5% the previous month). Overall direct funding (deposits from resident customers and bonds) in October 2024 increased by 3.2% on an annual basis, continuing the positive trend recorded since the beginning of the year (+1.6% in September 2024).
BANK LOANS
The decline in credit volumes is a consequence of the slowdown in economic growth which contributes to depressing the demand for loans: in October 2024, loans to businesses and families fell by 2.0% compared to a year earlier; in September 2024, loans to businesses had decreased by 2.4% and those to families by 0.4%.
NON-PERFORMING CREDITS
In September 2024, net impaired loans (i.e. the set of bad loans, unlikely to pay and past due and/or overdrawn exposures calculated net of write-downs and provisions already made by the banks) decreased to 30.9 billion euros, from 31, 9 billion in June 2024 (30.5 billion in December 2023). Compared to their maximum level, 196.3 billion reached in 2015, they are down by 165 billion.