Banks defend their rate spread
The spread between interest rates on loans and deposits is decreasing significantly, mainly after the recent increases in interest rates on new term deposits by Greek banks, according to the Hellenic Bank Association (HBA).
In a statement, the banks point out that “the divergence between Greece and the eurozone is limited, both in the interest rates of new time deposits and in the spread, even though the cost of borrowing from the capital markets is much higher for Greek banks than those of other countries.”
HBA focuses its analysis “on the margin of the total cost of new borrowing for individuals in relation to new term deposits of individuals with an agreed maturity of more than one year,” which, as it states, “was the same as that of March 2023 between Greece and the eurozone average (+0.75%).”
On the basis of this comparison, HBA’s analysis recommends the convergence of interest rates on term deposits and the closing of the gap with lending rates, contradicting the Bank of Greece’s methodology for comparing lending and deposit rates based on the weighted average interest rate for all categories of credit.
