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Commerzbank View On Bank Deposits As A Driver of Bank Supply

FINANCIALS
  • Slowing movement of deposits from overnight to term accounts may reduce margin pressure for banks, potentially stabilizing NIMs.
  • However broadly stable deposit volumes (HH +€108bn, NFC -€16bn) indicate 2023 deposit flow is not the primary driver of the recent increase in issuance – 2023 outstanding debt rose by €600bn, largely for collateral management purposes and particularly in France where CredAg accounted for over €90bn alone.
  • If current trends in deposit flows and loan growth continue, the pressure on bank bond issuance in 2024 is anticipated to be modest.

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