From the very start, the biggest interests are paid by Greek-held banks, which have had an aggressive interest policy in the last two years and have made several changes to their interests lately.
For instance, Alpha Bank pays 5% a year on euro amounts attracted over 12 months, while Banca Romaneasca and Piraeus pay interests of 4.9% and 4.8% a year for seven and five-month maturities respectively.
The fight of Greek bank subsidiaries for local resources comes at a time when parent banks are facing problems due to the Greek crisis and have to deal with massive deposit withdrawals.
The large Greek banks are now resetting deposit interests on a daily basis, and for the amounts attracted over the longer term they are willing to negotiate a higher interest with the clients.
Banks who offer generous interests on euro deposits also include Bancpost and ATE Bank, two other players which pay 4.45% and 4.5% a year respectively for six-month and one-year deposits.
The Greeks are followed closely by small banks such as Marfin, Intesa Sanpaolo and Carpatica, a Romanian-held bank which does not have any other resource of financing in euros.
Marfin pays 4.25% a year on six-month deposits, while Intesa promises an interest of 4.2% a year to clients who bring more than EUR1,000 to the bank.
Banks fight over a limited base of foreign currency resources, and this has amplified the trend of increasing interest rates.
Each bank hopes to attract more money if it boosts the interest, considering that clients don’t have a publicly available grid where banks are valued based on the risk involved.
Only the financial data reported by every bank according to its own standards could be a reference point for clients. In addition, those who have savings of less than EUR100,000 have the comfort of coverage by the state’s guarantee scheme.
High deposit interests are often correlated with significant losses posted by the banks that pay such deposits, considering that on the market there are no possibilities of profitable placements.
For instance, Banca Romaneasca, ATE Bank and Intesa were among the top five banks in terms of the value of losses reported, according to Romanian reporting standards.
(English version by Daniela Stoican)