Maltese deposits down in August

Deposits held by residents of Malta with Maltese monetary financial institutions went down by €131.1 million, or 1.6 per cent, in August, the Central Bank of Malta said. As a result, their annual growth rate slowed down to 2.5 per cent in August from 3.8 per cent in July.

Overnight deposits belonging to residents of Malta contracted by €133.3 million, or 3.2 per cent, during the month reviewed, though this was mainly due to a reclassification exercise. Deposits redeemable up to three months increased by €2.5 million, while deposits with an agreed maturity of up to two years declined marginally.

The expansion of deposits redeemable at up to three months’ notice was entirely attributable to households. In contrast, household deposits with an agreed maturity of up to two years contracted by €40.4 million, influenced by shifts towards assets outside the broad money stock (M3), including newly-issued Malta Government Stocks. Meanwhile, private non-financial companies increased their holdings of deposits with an agreed maturity of up to two years by €45.0 million.

After having contracted in the previous two months, credit to residents expanded by €93.6 million, or 0.9 per cent. Hence, the annual rate of credit growth accelerated to 7.4 per cent in August from 7.2 per cent in July.

Credit to the Maltese general government expanded by €32.1 million, or 1.5 per cent. This was attributable to a substantial rise in banks’ holdings of Malta Government Stocks, which offset a drop in their Treasury bill portfolios. Nevertheless, the annual growth rate of credit to general government decelerated to 9.7 per cent in August from 12.4 per cent in the previous month.

Similarly, credit to local residents other than general government increased by €61.5 million, or 0.8 per cent. This was mainly driven by a rise in loans extended to the transport, storage and communications sector and to households – to finance house purchases. The annual growth rate accelerated from 5.8 per cent in July to 6.8 per cent in August.

The weighted average interest rate paid by resident credit institutions on customer deposits increased marginally to 1.38 per cent in August from 1.37 per cent in the previous month, while that charged on loans declined from 4.75 per cent in July to 4.72 per cent.

Meanwhile the contribution of resident monetary financial institutions to the broad money stock of the eurozone decreased by 0.9 per cent, or €82.7 million, in August, reaching €9.1 billion.

As a result, its year-on-year growth rate slowed down from 3.2 per cent in July to 2.1 per cent.