Corporate deposits at local banks reached 35 billion euros at end-July, a level unseen since 2009. After that, for an entire decade, deposits had hovered around €18-20 billion.
The increased liquidity companies have obtained is mainly attributed to the government’s support measures during the pandemic, which have added up to €42 billion and of which some €9 billion concerns the part of the “Deposit To Be Returned” state loans that will not be paid back after all.
That high liquidity also explains the low demand for working capital that banks have experienced in recent months.
“This is the first time corporations have shown such high liquidity. That hasn’t been seen in the last few years,” commented a senior official at a systemic bank with a significant market share in corporate financing.
Bank sources explain that the increase in deposits concerning small enterprises with an annual turnover up to €2 million euros has exceeded €4 billion in just one year – that in itself constitutes a record. “That is unprecedented growth,” noted a competent bank official in a bid to explain the fact small companies have turned their bank on bank credit.