Latest news with #deposits
Times of Oman
4 days ago
- Business
- Times of Oman
Structural deposit pressure on Indian banks eases due to RBI's liquidity steps: Fitch
New Delhi: Indian banks are seeing a marked easing in structural deposit pressures, helped by the Reserve Bank of India's (RBI) aggressive liquidity support measures in 2025, according to Fitch Ratings. The global credit rating agency noted that since January, the RBI has injected approximately Rs 5.6 trillion, around 2 per cent of total system assets, into the banking system through government securities purchases. This has led to a liquidity surplus since March and significantly softened funding conditions for banks. Fitch believes that these steps have alleviated the intense competition for deposits that Indian banks had been grappling with over the past year. Structural deposit pressures had previously built up as loan growth outpaced deposit mobilization, driving up the loan-to-deposit ratio and forcing banks to raise deposit rates to attract funds. However, the RBI's liquidity easing, combined with a 100 basis point cut in the cash reserve ratio (CRR), is expected to release an additional Rs 2.7 trillion in liquidity in phases, has reversed that trend. The availability of surplus liquidity has already started driving down the cost of fresh deposits. Although Fitch anticipates a 30 basis point contraction in net interest margins for FY26 due to the immediate downward repricing of nearly half of the outstanding loans, it expects margin pressures to ease in FY27 as deposit costs fall further and the benefits of lower CRR requirements take hold. The report also points out that loan growth for FY25 is projected at 11 per cent, slightly above nominal GDP growth of 9.8 per cent, which may reflect rising risk appetite among banks. Despite the relief from structural deposit pressure, Fitch cautions that this could reverse if the RBI tightens liquidity in response to inflation or currency volatility. Such a move could again elevate funding costs and compress margins. In conclusion, Fitch asserts that the RBI's liquidity easing has played a central role in relieving structural deposit pressures in the Indian banking system.
Bloomberg
5 days ago
- Business
- Bloomberg
Chinese Investors' FX Pile Hits $1 Trillion Amid Low Local Rates
Chinese corporates and households boosted their foreign-currency deposits last month to the highest in three years, as they shunned the yuan on bets domestic interest rates will remain low. Total foreign-currency deposits onshore rose to $1.02 trillion in June, the highest since March 2022, according to data from the People's Bank of China released Monday. The net increase in the first half of the year was $165.5 billion, the biggest jump in data going back to 2005.
Bloomberg
11-07-2025
- Business
- Bloomberg
Turkey's Central Bank Signals Caution With Focus on Deposits
By and Beril Akman Save Turkish central bank Governor Fatih Karahan said policymakers are closely watching deposit preferences among local savers, signaling officials are likely to approach potential interest-rate cuts cautiously. Speaking to investors in closed-door meetings in London, monetary officials stressed deposit choices as an important indicator as they weigh upcoming rate decisions, people familiar with the discussions said, asking not to be named because they are private.
Arab News
10-07-2025
- Business
- Arab News
Saudi money supply surges to $824bn as savers embrace high-interest deposits
RIYADH: Saudi banks' money supply M3 reached SR3.09 trillion ($824.3 billion) in May, rising about 9.39 percent from the same period last year. According to data by the Saudi Central Bank, also known as SAMA, time and savings deposits accounted for 35.16 percent of the total, slightly below the 16-year peak of 35.2 percent recorded in March, but still representing the highest share since 2009. The expansion has been driven by a marked shift in deposits. Savers are increasingly locking their money into term deposits to take advantage of higher interest rates. These interest-bearing accounts have grown at the fastest pace among all money categories, reflecting depositors' preference for higher returns amid a high-rate environment. Term deposits offer better interest in exchange for keeping funds for a fixed period, and therefore tend to gain popularity when interest rates are elevated. Despite this shift, demand deposits — funds in checking accounts that can be withdrawn on demand — remain the single largest component of the money supply, at around SR1.5 trillion, or roughly 48.6 percent of M3. That share has edged down from over 49 percent a year ago as more savers move into interest-yielding options. Meanwhile, other quasi-money deposits, such as foreign currency accounts and certain short-term instruments, represent roughly 8 percent or SR250 billion of the total, and physical currency in circulation outside banks adds about SR246 billion, according to SAMA data. As the US Federal Reserve embarked on aggressive rate hikes over the past two years to curb inflation, SAMA mirrored those moves to maintain the currency peg. This pushed Saudi interest rates to multi-year highs, peaking around 6 percent late last year. With inflation pressures subsequently easing, the US Fed began to loosen policy, implementing rate cuts totaling 100 basis points by the end of 2024. The rate relief was expected to continue into 2025. Indeed, by January, signs emerged that the deposit mix was starting to rebalance, as demand deposits began regaining ground once benchmark rates had come off their peak, according to SAMA data. Any further rate cuts were abruptly put on hold amid renewed global inflation concerns. Speaking earlier this month at the European Central Bank's annual forum in Sintra, Portugal, Federal Reserve Chair Jerome Powell said the Fed would probably be in a position to begin cutting rates were it not for the inflationary impact of President Donald Trump's new tariffs, according to Bloomberg. Central bankers expect Trump's import tariffs to lift inflation, so they have adopted a cautious 'wait-and-see' stance before resuming any rate reductions. As a result, the Fed has kept rates steady in recent months, after having trimmed about 100 basis points late last year, with the risk of inflationary pressure from tariffs delaying further easing. Given that SAMA typically mirrors Fed decisions to defend the riyal's dollar peg, this pause in US rate cuts has likewise led the Saudi central bank to hold its rates, keeping domestic borrowing costs elevated. Banks, in turn, have been competing for deposits by offering better returns on time accounts, a strategy to shore up liquidity while credit demand stays strong. Looking ahead, officials and analysts foresee an eventual turning point in the interest rate cycle. Goldman Sachs, for example, now projects that the Fed will begin cutting rates later in 2025, delivering three quarter-point rate cuts by the end of the year, up from two cuts in its earlier forecast, according to a July article by Bloomberg. Until that pivot materializes in interest rates, Saudi banks and their customers are capitalizing on the elevated returns offered by term deposits — a trend that has pushed savings deposits to record highs and fundamentally altered the composition of the Kingdom's money supply.
Entrepreneur
05-07-2025
- Business
- Entrepreneur
HDFC Bank Reports 16.4% Jump in Deposits in June Quarter
Period-end deposits stood at INR 27,640 billion as of June 30, 2025, a 16.2 per cent increase from INR 23,791 billion a year earlier and 1.8 per cent growth over INR 27,147 billion as of March 31, 2025. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. HDFC bank posted steady growth in both advances and deposits for the quarter ended June 30, 2025, with key metrics reflecting sustained lending momentum and a robust deposit inflow, according to a regulatory filing. Average advances under management stood at INR 27,423 billion in the June 2025 quarter, marking an 8.3 per cent increase from INR 25,327 billion a year earlier and a 1.7 per cent rise from INR 26,955 billion in the previous quarter. The period-end advances under management reached INR 27,820 billion as of June 30, up 8.0 per cent year-on-year and 0.3 per cent sequentially. Gross advances at the end of the quarter were INR 26,530 billion, a year-on-year rise of 6.7 per cent from INR 24,869 billion. During the same period, HDFC bank securitised or assigned loans worth INR 33 billion as part of a strategic move to manage risk and liquidity more efficiently. On the deposit side, average deposits for the June 2025 quarter were INR 26,580 billion, reflecting a 16.4 per cent increase from INR 22,831 billion in the corresponding period last year and a 5.1 per cent rise over INR 25,280 billion reported in the March 2025 quarter. The breakdown of deposit growth shows a continued shift towards time deposits. Average time deposits grew 22.1 per cent year-on-year to INR 17,976 billion, and rose 5.8 per cent compared to the previous quarter. In contrast, average CASA (current and savings account) deposits rose 6.1 per cent to INR 8,604 billion from INR 8,106 billion a year earlier, and were up 3.8 per cent from INR 8,289 billion in March. Period-end deposits stood at INR 27,640 billion as of June 30, 2025, a 16.2 per cent increase from INR 23,791 billion a year earlier and 1.8 per cent growth over INR 27,147 billion as of March 31, 2025. Period-end time deposits rose sharply to INR 18,270 billion, up 20.6 per cent year-on-year and 3.2 per cent over the previous quarter. CASA deposits at period end were INR 9,370 billion, an 8.5 per cent annual increase, though slightly down—by 0.8 per cent—from the March 2025 quarter. The data indicates a continued preference among depositors for fixed returns amid evolving rate dynamics, even as the bank maintains steady growth in its lending book. The mixed trend in CASA deposits suggests a competitive retail deposit environment.
