Current accounts, war in Ukraine drives deposits rush of Italian families

The conflict in Ukraine has prompted a rush by Italian families to grab cash, a trend already unleashed by the pandemic. Suspended deposits in checking accounts grow even in times of war, as do requests for personal and expired loans. So much so, that the race requires banks to invest in innovation and digital services.

Deposit increase

Neither the war that broke out at the end of February nor inflation concerns seem to have stopped the Italians’ race for “liquid” savings. Deposits of consumer families, in particular, in March amounted to 1,174 billion euros, an increase of 0.21% compared to the previous month, when the Russian military offensive began. To say this is the data for the amounts of the Bank of Italy, which has recorded a steady trend in the past two years: since the outbreak of the epidemic (March 2020), the increase has been 9.96 percent.

This trend is confirmed by ABI estimates for April, on the basis of which deposits (including checking accounts, certificates of deposit and repurchase agreements) of all resident clients – including businesses – increased by an additional 5.2%, an increase of €92 billion in one year. .

To a large extent, this was initially a backlash associated with the inability to spend on many sectors and services and uncertainty about the future. Then came the consumer crisis. So much so that today liquidity is putting banks under stress, and they risk overburdening management, thanks to a long period of negative rates. Hence the need for credit institutions to better monitor inflows, to invest to improve expenditures and to stimulate investment units, for example with a view to encouraging clients to transfer part of their liquidity to funds or policies. In fact, there is no rate of return that can save deposits set aside due to high inflation.

Boom in “short” loans

Meanwhile, in May, requests for loans from families, both personal and final, increased 23% according to Craif. And demand is driving up payments, which grew by 4% in March (ABI’s latest bulletin). Mortgages for home purchases both rose (+5.2%) and consumer credit (+1.7%). In particular, at the end of 2021, the share of sales financed by mortgage loans increased to 73%, approaching summer 2019 values.

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