The CEO of KBC, Johan Thijs, has responded to the statement of Belfius boss Marc Raisière, who stated last week that he does not see the savings interest immediately increased before the end of the year. Thijs, however, believes the opposite, writes ‘De Standaard’. If the European Central Bank (ECB) continues to raise the deposit rate, the savings rate may rise, according to the KBC boss.
“To declare that the banking industry, including Belfius, will increase its savings rates globally before the end of the year would be a lie,” Belfius CEO Marc Raisière said during a press conference on the half-year results last week. KBC Group does not share this view. “Our answer is more nuanced. The interest on the savings account strongly depends on the ECB interest rate. We expect it to be 1.25 percent to 1.50 percent by the end of this year,” KBC CEO Johan Thijs told ‘De Standaard’. “But it remains a commercial decision,” it sounds.
In other words, if, according to Thijs’ forecast, the ECB interest rate actually goes to 1.50 percent by the end of this year, the interest rate on savings could go up. Today, banks pay 0.11 percent on savings accounts, plus 0.33 percent in bank levies. As soon as the ECB interest rate reaches 0.44%, banks will find themselves in a situation where they neither make a profit nor suffer a loss.
Some bankers want to postpone raising the savings rate for as long as possible and wait to follow the rising market interest rate. For example, it is profitable for the banks if the interest on savings on savings accounts and term accounts remains low, while the market interest rate does rise. “We provide credit at rates that do not yet sufficiently reflect that money has become more expensive. The commercial margin on home loans has never been this low in the past ten years,” says Thijs, who speaks of a halving.
Profit figures
Like Belfius last week, KBC also announced “excellent” profit figures. Belfius recorded a net profit of 428.5 million euros in the first half, an increase of 23 million euros compared to last year and the “best half-year result ever”. KBC earned 811 million euros between April and the end of June, almost 100 million more than what analysts had expected.
Moreover, the bank did not suffer any loan losses, although KBC does think that those losses will rise to 10 to 25 basis points in the second half of the year, converted 200 million to 500 million euros.
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