Banks: December sees sharp rise in deposits

Chart of the Week

Eurozone bank deposits rose sharply in December 2023, hitting record highs last seen during the Covid lockdown of April–May 2020. The increase was mainly driven by a sharp rise in household bank deposits.


December is traditionally a strong month for household deposits fuelled by year-end bonuses or 13th-month salaries, yet December 2023 outstripped previous years’ averages. With no simultaneous rise in new loans, borrowing does not explain the spike.

We can deduce that the high bank deposits were composed of household savings awaiting investment in financial products such as life insurance, securities accounts and equity savings plans. December’s traditional peak in household bank deposits appears to have been stronger than usual in 2023 and may stem from savers delaying investment decisions until market uncertainty abates.

The rise in customer deposits is positive for banks because the funds can either be invested with the ECB at the current deposit facility rate of 4%, or in money markets and bonds. These investments contribute to banks’ Net Interest Margins as a result of the maturity transformation process, which involves short-term borrowing and long-term lending.


Written on Feburary 2, 2024. This is not an investment advice. Opinions subject to change.

See also:


This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Frères Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Frères Gestion SAS. LAZARD FRERES GESTION – a simplified joint stock company with share capital of €14,487,500 – Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES – 75008 PARIS, FRANCE