2023-08-14 14:37:21
The banks are currently benefiting from the monetary policy of the European Central Bank (ECB). Since July 2022, it has raised key interest rates sharply. This also widened the gap between lending and deposit rates. And that’s why the interest surpluses of the domestic banks also increased: According to the National Bank, they increased by 45 percent in the first quarter compared to the same period last year to EUR 6.02 billion, reported the “Oberösterreichische Nachrichten” (OÖN) in the current issue.
Compared to 2021, the difference between deposit and loan interest has even increased by 60 percent – which caused the FPÖ and SPÖ to demand a special tax or regulation. However, economists and – naturally – bankers have little to gain from these plans.
“Monetary policy has had a negative impact on banks’ interest income for years,” quotes OÖN Thomas Url, banking expert at the Economic Research Institute (Wifo): “Now we are partially returning to the normal situation.” The most important contribution to this comes from the elimination of penalty interest on the ECB for parking deposits. According to Url, the rate hikes were passed on to both sides – albeit only partially. The average effective interest rate on housing loans in Austria rose from 2.1 to 4.25 percent between July 2022 and June 2023. The average interest rate for savings deposits with a term of up to one year climbed from 0.18 to 2.66 percent. If lending rates rose more sharply at first, the banks would have increased deposit rates more recently. A special tax would only harm Austria as a business location, the economist added.
In a press release, the liberal business think tank Agenda Austria pointed out that the key interest rates in Austria were comparatively high. Only Great Britain, France and Luxembourg fared better here. “Due to the prolonged phase of zero interest rates and the government aid programs in recent years, there is still plenty of money, and the high supply is pushing down interest rates,” says Agenda Austria economist Hanno Lorenz.
Erste Group increased net interest income in the first half of the year by 25 percent compared to the same period last year and by 45 percent compared to 2020. At RBI, it rose by 25 and 82 percent, respectively, the newspaper reported.
However: In the phase of negative interest rates, they were not allowed to be passed on to savers, Oberbank General Director Franz Gasselsberger told OÖN. At Oberbank, net interest income rose by 17 percent in the previous year. But the banks also have higher administrative expenses, the Oberbank boss noted. And: “The populists overlook the fact that a special tax would have negative consequences for Austria’s financial center”.
However, the FPÖ and SPÖ did not let this deter them from their demands: “In the current phase of record inflation, when many borrowers can no longer repay their variable-interest loans, the banks must finally act, because they are beneficiaries of the ECB’s interest rate policy and are grazing through it random profits worth billions on the backs of their customers,” said FPÖ financial expert Hubert Fuchs, according to a broadcast. FPÖ federal party chairman Herbert Kickl brought not only an excess profit tax, but also an increase in the bank levy into the discussion – or one might also suspend the capital gains tax. SPÖ finance spokesman Jan Krainer in turn explained: “In Great Britain, for example, the government is threatening the banks with British supervision if interest rates are too high, in France there is minimum interest on savings. In Germany, on the other hand, there are significantly higher interest rates on savings than in Austria because of the Competition works and Italy implements an excess profits tax for banks.”
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