Small savers manage to award the amounts requested since they do not set a maximum price that they are willing to pay
In full euphoria between the savers by public debt in general, and for the short-term titles of the Treasure in particular, the State has awarded this Tuesday €1,959.17 million at an auction of letters to three (508.96 million) and nine months (1,450.22 million), in the middle part of the expected range (between 1,500 and 2,500 million). The most significant, once again, has been that the requested amount by investors, both small and professional, has amounted to 6,365 millionmore than triple the amount awarded.
The quantity ordered, likewise, is somewhat lower to that of the similar auction of January (1,457 million and a 18% less) but very superior to the of December (2,749 million and a 76% more). As in the last placements, the interests have risen again both in securities with a maturity of one quarter (from 2.198% in January to 2,520%maximum since July 2012) and three quarters (from 2.839% to 2.973%maximum since its creation in 2013).
the savers individuals who have attended the offer have managed to buy the number of letters that were required in a general way. Many large professional and institutional investors set a Maximum price above which they are not willing to buy the titles, which helps explain why the amount awarded by the Treasury is more or less a third of that requested. Instead, small retail investors submit their buy orders without that limit of cost, with which the values are assigned to the half price set at auction.
The interest of individuals in public debt, especially in the shortest terms, has skyrocketed in recent weeks due to the increase in interest paid and compared to some little guys of the deposits banking. This is demonstrated by the tails registered at the offices of the Bank of Spain to buy it before it was forced to request a prior appointment or the problems that the company has suffered Treasury websitetwo ways cheaper to acquire it that through the banks. In January alone, the Treasury sold 400 million of debt through its website, more than in all of 2022, and in the first five weeks of the year it received requests for a value of 1.1 billion,700 million in the last two weeks.
fashion investment
The State debt is undoubtedly in fashion. The data indicates that the homes increased in 2022 their investment in public debt for the first time since 2015. According to the latest figures from the Bank of Spain, individuals closed November with 2,232 million euros invested in Treasury securities (950 million in short-term bills and 1,282 million in longer-maturity bonds and obligations). The figure is 1,222 million and a 120% higher to that of a year before and 869 million and 63% higher than that of October.
The reason is that the rise in interest rates European Central Bank (ECB) — three points from July, until the 3%— has been transferred to interest on public debt, not bank deposits, which explains its greater appeal to households. Thus, the average debt rate in circulation stood at the end of last year in the 1,727%from 1.636% a year earlier, in what was its first rise since 2011.
More representative to understand the renewed interest of households are the types of the new issues of debt. An example: that of bills at six months went from -0.66% in those auctioned in December 2021 (the State returned to the investor less money than it had lent) to the 2.04% from last December. In January and February they have continued to rise, as demonstrated by the auction on Tuesday.
More interest than deposits
Faced with these rates, the average interest of the new deposits banks in December was 0.64%, compared to 0.06% a year earlier and the 1.83% average for the euro zone. The country’s big bankers, thus, have confirmed in recent weeks what was evidence for months: they are not increasing pay of deposits despite the rise in official rates of the European Central Bank (ECB), which will delay everything possible, and in no case will it be a rise in rates substantial nor pervasive.
Behind this strategy is that the ECB rate hike allows banks to obtain a higher profitability for your customers, something that they do not want to miss after eight years of negative official price of money. While the average type of deposit balance just came up from 0.4% to 0.18% between December 2021 and last year, the euribor it shot up from -0.5% to 3.018% (with the consequent rise in mortgage payments) and the rate on new loans for home purchases increased from 1.38% to 2.91% (in line with 2.94% in the euro zone).
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This has caused a general increase in what is known in the sector as customer spread, that is, the margin that exists between the average rate that they are charged for lending them and the average rate with which they remunerate their savings. In addition, entities enjoy plenty of liquidity, with which they have no need to capture deposits. Of course, instead of paying for deposits, they are encouraging their saver clients to hire investment fundsespecially public and corporate debt or guaranteed capital, which allow them to collect more commissions.
The statistics of the Inverco employers’ investment funds prove the bank’s strategy. Nine o’clock largest managers of the Spanish market, which belong to the major banks in the country, increased their number of clients in January by 8,493 compared to December, up to 14.6 million, and registered net subscriptions in January worth 2,790 million euros (8,257 million in entries and 5,466 million in withdrawals). For the group of managers, for their part, the figure was 3,202 million and in an overwhelming majority (2,726 million, 85%) the money went to public and private fixed-income funds.