The Bank of Greece reported on Wednesday a significant narrowing of the spread between loan and deposit interest rates in October, following a faster decline in rates on loans than on deposits.
The average interest rate on all loans fell by 19 basis points to 5.41%, with the largest decreases observed in business loans, which are also an area of competition between banks.
On the contrary, the average rate on deposits (including savings accounts) fell to 0.53%, with the largest decrease observed in the rates on term deposits by businesses, which fell to 2.77% from 2.98% in September, while the average interest on term deposits for households fell to 1.84% from 1.86% in September.
In relation to European banks, however, the interest rate on term deposits in this country remains among the lowest by some margin. For example, the Italian one stood at 3.69% in October.
Data show a faster drop in the cost of money for small and very small businesses, that is, for loans up to 250,000 euros and up to €1 million, the average interest rate of which fell in October to 5.48% and 5.44% respectively, from 6.04% and 5.55% respectively in September.