Malta residents’ total deposits on the increase

Total deposits belonging to residents of Malta and held with resident microfinance institutions (MFIs) went up by €37 million, or 0.4 per cent, in September, according to the Central Bank of Malta.

The increase in overnight deposits reflected growth in households’ balances

This increase was attributable to a higher volume of overnight deposits, which rose by €23.8 million, or 0.5 per cent, in September. Deposits with an agreed maturity of up to two years also rose by €20.7 million. On the other hand, deposits redeemable at notice up to three months declined by €7.5 million. The year-on-year growth rate of total deposits rose to 4.2 per cent in the month reviewed, from 3.7 per cent a month earlier.

The Central Bank said the increase in overnight deposits reflected growth in balances held by households, as deposits held by public non-financial companies (NFCs), insurance companies and other financial intermediaries fell whereas deposits held by private NFCs were largely stable.

The rise in deposits with an agreed maturity of up to two years was driven by private NFCs, insurance companies and other financial intermediaries, whereas those held by households and public NFCs fell. The drop in deposits redeemable at notice up to three months was spurred by movements in those held by households and to a lesser extent by private NFCs.

Credit issued by resident MFIs to residents of Malta (including the government) expanded by €110.8 million, or one per cent in September, on account of an increase in credit to residents other than the general government, which increased by €116.3 million, or 1.4 per cent. The annual rate of growth of total credit increased to 5.1 per cent from 4.5 per cent in August.

The increase in credit to residents outside the general government during the month was brought about by a rise in credit to households for house purchases and to private NFCs, particularly those in construction and in the wholesale and retail sector. Meanwhile, lending to public NFCs also rose, albeit at a slower pace.

On the other hand, credit to the general government fell by €5.5 million, or 0.2 per cent, spurred by a decrease in banks’ holdings of Maltese government bonds, which completely offset a rise in loans to the sector.

Net foreign assets held by resident MFIs decreased by €65.5 million, or 0.6 per cent, in September, as a rise in their external liabilities outweighed a concurrent increase in external assets. The year-on-year growth rate fell to two per cent in September from 2.6 per cent in August.