Today Banco de Portugal publishes the Retail Banking Markets Monitoring Report. The report presents developments in the markets for deposits and credit in 2015.

Simple term deposits with lower return, while maturities continued to be short.

In 2015, the supply of simple term deposits was less diversified than in the previous year, and the market continued to have fixed interest rates almost exclusively.

The interest rates declined in all maturities. At the end of the year, 86% of term deposits offered had an annual gross nominal rate equal to or lower than 1% (59% in 2014). Around 84% of the deposits offered had a maturity of up to one year (85% in 2014).

The share of simple deposits with more flexible conditions in terms of their opening or early withdrawal increased from the previous year. The share of deposits with a minimum opening amount of up to €150 increased also, as well as the percentage of deposits allowing for the early withdrawal of the funds.

Market of structured deposits maintained upward trend.

In 2015, the market of index-linked and dual deposits continued to grow, collecting around €5.5 billion, 24% more than in the previous year. At the end of the year, €10.4 billion had been invested in this type of deposits, 44% more than in the previous year, representing 10% of the total amount invested by private bank customers in term deposits.

The interest rate of approximately 42% of index-linked deposits overdue was higher than the interest rate of simple term deposits in the same institution for the same maturity (49% in 2014). As regards index-linked deposits overdue, 22% paid the maximum return indicated in the respective information leaflet (24% in 2014) while 51% paid the minimum return (44% in 2014). 19% of deposits had zero return (11% in 2014).

Mortgage credit recovered strongly.

In 2015 the number of new mortgage credit contracts concluded and the amount of mortgage credit granted increased by 51% and 65% respectively from 2014. The average value of new contracts increased also (9.2%), as well as the average maturity.

Approximately 89.5% of new contracts were concluded at a variable rate (88.8% in 2014); six-month Euribor continued to be the mostly used index (59.3% of the contracts). The average spread of the contracts stood at 2.31 percentage points, 0.67 percentage points less than in 2014.

The number and the amount of early repayments increased by 1.8% and 31.5% respectively from the previous year. The number of contract renegotiations declined by 18.6%.

Consumer credit increased again, especially in car loans.

The number and amount of new consumer credit contracts grew by 7.8% and 23% respectively in 2015 from the previous year, especially car loans, with an increase of 40.9% of the amount granted (after an increase of 33.2% in 2014).

The increase in credit granted was accompanied by a decline in the cost of credit in all segments. The average annual percentage rate of charge (APR) in the market attained 11.9% in the last quarter of 2015, 1.7 percentage points less than in the same period of 2014. This decline was more marked in the revolving credit segment, where it decreased by 2.2 percentage points.

Lisbon, 26 July 2016