MILAN, April 6 (Reuters) - The average interest paid on
12-month deposits in Italy stood at 2.48% at the end of March,
up from 2.36% in February, data showed, as banks slowly pass
higher official interest rates on to depositors.
European banks have been slow in raising returns on cash
deposited by retail customers but analysts expect competition to
increase in the wake of recent banking failures in the United
States and the forced takeover of Credit Suisse .
Data processed for Reuters by account comparison website
ConfrontaConti.it showed an average 20,000 euro deposit as of
March 30 would earn 370 euros in interest over a one-year
period, up from 350 euros in February, a 5.8% increase.
The increase is 4% for a 18-month term deposit and just 1%
for a six-month deposit.
After shielding retail customers from negative rates in
recent years, Italian banks have tried to profit from the gap
between 'active' rates charged on loans and those paid on
deposits as the cost of credit started rising.
Passive interest rates which lenders pay to depositors
typically rise with a lag compared to active ones.
The Bank of Italy warned in early February, before the
market turmoil erupted, that such a lag could reduce more
quickly than in the past, with banks' funding costs rising
faster than normal given the abruptness of the monetary policy
tightening.
The Bank of Italy has also called on banks to revise deposit
terms to increase benefits for customers as monetary policy
normalises.
The threat of higher funding costs is bigger for specialist
lenders than traditional commercial banks, with
ConfrontaConti.it featuring term deposit offers mostly from
challenger banks on its home page.
Banca AideXa, a digital lender specialising in small- and
medium-sized enterprises (SMEs), ranked first with a 4.5% gross
rate for a three-year deposit. ViviBanca followed with a 4.15%
rate also over 36 months.
(Reporting by Valentina Za; Editing by Christina Fincher)
