Dutch Savers Flock to Foreign Banks as Domestic Rates Lag Behind
AMSTERDAM – Dutch households are increasingly looking beyond their borders for better returns on theirsavings, with deposits in foreign banks doubling in the past two years, according to data released by De Nederlandsche Bank (DNB), the Dutch central bank.
As of June 2024, Dutch households held approximately €15 billion in banks located in other eurozone countries, a significant jump fromthe €7.3 billion recorded in June 2022. This trend reflects a growing dissatisfaction with the interest rates offered by Dutch banks, which have been criticized for not keeping pace with the European Central Bank’s (ECB)interest rate hikes aimed at combating inflation.
Foreign savings keep growing, DNB stated in its report. While this figure represents a small fraction of the total €597.3 billion held by Dutch households in domestic banks,the upward trend is undeniable, rising from 1.3% of total deposits in June 2022 to 2.4% in June 2024.
The allure of higher interest rates offered by foreign banks is the primary driver behind this shift. Dutch banks have been criticized for prioritizingtheir own profitability over passing on the benefits of ECB rate hikes to savers. This disparity has led many Dutch households to seek out more lucrative options abroad.
Italy has emerged as a popular destination for Dutch savers in recent years. As of June 2024, Dutch households held approximately €2.6billion in Italian banks, a figure comparable to the amount held in Germany. For many years, Germany has been the euro area country where the Dutch held the most bank deposits, DNB noted.
Estonia has also seen a surge in popularity among Dutch savers since the ECB began raising interest rates. This trend islikely driven by the country’s relatively high interest rates, attracting those seeking to maximize their returns.
While Dutch households are increasingly moving their savings abroad, the reverse trend is also occurring, albeit at a much slower pace. Bank deposits from households in other eurozone countries in Dutch banks have also increased, but only marginally. In June 2024, these deposits amounted to €12.7 billion, compared to €10.6 billion two years prior. This category includes Dutch emigrants who have been living abroad for more than a year.
The growing trend of Dutch households seeking higher interest rates abroad highlights the ongoing pressureon domestic banks to offer more competitive rates to their customers. This trend could potentially impact the Dutch banking landscape, as savers continue to explore alternative options for their savings.
The DNB report suggests that the Dutch banking sector may need to adapt to this changing landscape, offering more attractive interest rates to retain their customerbase and compete effectively with foreign institutions. Failure to do so could lead to further outflows of savings, potentially impacting the Dutch economy in the long term.
Views: 0