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Summing up, the recent past trend remained in place in May, Deposits keep growing above moving averages, mainly Individuals, in May +5.8%YoY; while the ratio Loans to Deposits is reaching a new low, 0.8186. Meanwhile, interest rates on new time Deposits, continues to come down, namely individuals 2.75%; however at a slow pace, only -4bpMoM, and that probably explains why Deposits at Individuals keep growing (plus the lower remuneration of Certificados de Aforro and the limits on total amounts owned). Finally, the industry is trying to improve the margin on new business, our proxy points to 2.13% still below moving averages, by keeping interest rates almost stable on new Loans, however the loans demand by Corporates remains negative (-2.1%YoY); while Consumption and Other Purposes continues to grow +2.6% and Mortgages demand is almost positive on an earlier basis and positive on a monthly basis. Last but not least, Overdue Loans ratio are stable on “Mortgage” loans and “Consumption and Other Purposes”, however slightly increased on Corporates, almost irrelevant, nevertheless is important to follow

The Bank of Portugal has just released May’s second set of banking data, namely Interest rates on new Loans and Interest rates on new time Deposits.

We would highlight the following points:

Banking Interest rates - New Loans (average):

1. Corporates: +5.62% vs. 12MMA (12 months moving average): +5.73% and 3MMA: +5.66%;
2. Mortgages: +3.71% vs. 12MMA: +4.07% and 3MMA: 3.78%;
3. Consumer Loans and Other Purposes: +7.97% vs. 12MMA: 7.90% and 3MMA: 7.97%.

Banking Interest rates – New time deposits (up to 1 year; average):

• Corporates: 3.31% vs. 12MMA 3.23% and 3MMA of 3.37%;
• Individuals: 2.75% vs. 12MMA  2.55% and 3MMA 2.78%.

Net Interest Margin (NIM, proxy) +2.13% vs. 12MMA +2.50% and 3MMA 2.14%.

Separately, the BoP released, one week ago, the first set of banking data, namely Loans and Deposits volumes in May, we would highlight the following:

1. Total Loans: -0.5%YoY vs. 12MMA: -1.4% and 3MMA: -0.7% (Corporates: -2.1%YoY; Mortgages: -0.1%YoY vs. 12MMA: -0.7% and 3MMA: -0.5%; Consumption and Other Purposes: +2.6% YoY)  
2. Total Deposits: +4.27%YoY vs. 12MMA -0.6% and 3MMA 3.2%;
3. Loan to Deposit ratio: 0.8186 vs. 12MMA 0.8409 and 3MMA: 0.8238;  
4. Overdue Loans ratios:

• Corporates: 2.13% vs. 12MMA 2.10% and 3MMA 2.05%;
• Mortgages: 0.27% vs. 12MMA 0.26% and 3MMA 0.26%;
• Consumption and Other Purposes: 2.74% vs. 12MMA 2.86% and 3MMA: 2.69%.  

Source: BoP, INE AS Independent Research