July 2020

Eurozone Deposit SpotlightQ1-3/2020 | December 2020

As a result of the Covid-crisis, many people throughout Europe are keeping more money in their accounts. However, this is not done to the same extent everywhere. Instead, the differences between countries’ deposit markets are increasing: In Germany, France and Italy, deposit volumes are growing faster in relation to the size of the market, whereas in countries such as Spain, Portugal or Belgium, they are growing at a slower pace if growing at all. High deposit growth in the domestic market can be a problem for banks that already have deposit surpluses. If customers deposit even more money in their accounts, these banks’ negative interest rate burdens are driven up. On the other hand, banks in countries that want to fund themselves specifically with retail deposits often only have national reach for their deposit products. This means that they cannot benefit from the higher demand for savings deposit products in other countries, such as Germany. Banks will have to drive the development of a European deposit market themselves. As a FinTech company, we provide the necessary infrastructure for this.

Dr. Tim Sievers, CEO & Founder of Deposit Solutions

Corona crisis pushes deposit inflows to record high

• By Q3 2020, net inflows to Eurozone deposit accounts already exceeded the inflows of 2019 by 1%.

• Especially Q2 saw a significant increase in inflows, with over EUR 200 billion additionally deposited on Eurozone bank accounts.

• In Q3 2020, banks recorded the highest inflows ever in a third quarter.

100

250

300

150

200

50

0

400

450

350

-14

8217

114

Q1 Q2 Q3 Q4

2015 2016 2017 2018 2019 2020*

- 50

30

58

93

44

19

96

79

40

*Q1-Q3

18

117

123

42

44

110

135

106

Net flows of retail deposits | Eurozone, in EUR bn.

82

224

94

EUR bn

Quarterly fluctuations follow the usual pattern, but at a higher level

Net inflows per quarter | Eurozone, in EUR bn.

Q1 Q2 Q3 Q4

2017 2018 2019 2020

100

250

150

200

50

0

- 50

94

40

79

19

96

42

123

18

117

110

44

135

106

224

82

EUR bn

Germany, France and Italy account for over 80% of Eurozone deposit net inflows

• Germany, France and Italy accounted for by far the highest inflows in the Eurozone.

• 83% of all deposit inflows in the Eurozone are tied to these three markets.

Net flows of retail deposits third quarter 2020 | per country in EUR bn.

Germany France Italy Ireland FinnlandNether-lands

Luxem-bourg

Greece Austria Spain Lithuania Portugal Slovakia Latvia Malta Slovenia Estonia Cyprus Belgium

10

25

30

15

20

5

0

35

- 5

29.3

23.6

15.4

3.2 2.9 2.1 1.6 1.0 0.9 0.9 0.7 0.6 0.5 0.1 0.1 0.0 0.0

- 0.2 - 0.8

EUR bn

Net inflows are not distributed evenly across Europe

In relation to their respective share of the total volume, net inflows are disproportionately high in Germany, France and Italy, but relatively low in the Netherlands, Belgium, Portugal and Spain.

Share of total Eurozone deposit volume

Share of total Eurozone net-inflows

0% 5% 10% 20% 25%15% 30% 35% 40%

31%

Austria

Spain

Italy

Belgium*

Netherlands

Portugal

Ireland

France

Greece

Finland

Luxembourg

Others

Germany36%

20%29%

15%19%

11%1%

6%4%

5%0%

3%1%

2%1%1%

4%1%1%1%

3%1%

2%

2%2%

Share of total Eurozone deposit volume/net-inflows by country | Q3 2020 *Outflows amounting to 1% of the total volume

Total Eurozone deposit volume exceeded EUR 8 trillion in May

• With savings rates in the Eurozone well over 12% in the last few years (12,89% in 2019, according to Statista), the deposit volume is constantly rising.

• 2020 may see an acceleration of this development. In Germany, for example, the savings rate is expected to rise to 16%, according to a study published by DZ Bank in September 2020.

• In May 2020, the Eurozone deposit volume has passed the mark of EUR 8 trillion.

Total deposit volume 2020 | Eurozone in EUR bn.

Oct Nov Dec Feb MarJan Apr May June July Aug Sept

6,000

7,500

6,500

7,000

5,500

5,000

9,000

8,000

8,500

7,7137,662 7,758 7,7647,808 7,851

7,9538,034 8,075 8,124 8,132

8,157

EUR bn

Attila RosenbaumHead of Communications

T: +49 40 696 328 894M: +49 162 406 5452attila.rosenbaum@deposit-solutions.com

Deposit Solutions GmbHDrehbahn 7-1120354 HamburgGermanywww.deposit-solutions.com

Sitz der Gesellschaft / Registered Office: HamburgRegistergericht / Commercial Register: Amtsgericht Hamburg, HRB 118186Geschäftsführer / Managing Directors: Dr. Tim Sievers,Michael Maximilian Mueller, Andreas Wiethölter

This publication is based on data from the European Central Bank, Statista, Eurostat and Barkow Consulting. Retail deposits are defined as bank deposits of private households. All data as of 30 September 2020.