In November, deposits of Czech companies exceeded loans by as much as CZK 75 billion. They found themselves in a unique situation where companies have more money in bank deposits than they owe in the third quarter of 2020. This follows from the current statistics of the Czech National Bank, which was pointed out by the Czech Banking Association.
From the beginning of last year until the end of November, the position turned by one hundred billion, as companies have traditionally taken out loans and had significantly fewer deposits. Businesses and households are responding to the increase in uncertainty in the future by reducing investments or other large expenditures, and are trying to strengthen their financial reserves, an analyst at the Czech Banking Association Miroslav Zámečník told ČTK.
According to the CNB’s current banking statistics, November brought an increase in koruna deposits and foreign currency deposits, both in relation to non-financial corporations (by 9.8 billion to 1.227 trillion crowns) and households (by CZK 18.3 billion to 2,774.2 trillion CZK), and self-employed (by 3.6 billion to more than 165.7 billion crowns).
According to Zámečník, the fact that companies, trades and households were able to raise deposits by 12 percentage points, 14 and ten points in all cases disproportionately faster than their nominal incomes grew testifies to the fact that the level of uncertainty is really high. After all, many industries are experiencing the cessation of operations for the third time in one year, and despite the various forms of support, it was not possible and they cannot compensate for the loss of sales in any way, he added.
The ability to increase the cash reserve is very different, even within individual fields, where the differences in the amount of funds available in their bank accounts are significantly deepening. In repeatedly affected sectors, financial tensions are growing, which is confirmed by a decline in deposits and thus a deterioration in the balance between loans and deposits. This is most evident in accommodation services, but also in catering and hospitality, Zámečník noted.
“If something is surprising, it is the fact that there are still some balances on deposit accounts at the industry level,” he said. Specifically, it was 6.5 billion in accommodation in November, which is a decrease of more than a quarter since the outbreak of the first wave of the pandemic. The balance in catering and hospitality is over 9.5 billion, and has basically not changed since the beginning of the crisis. Banks are increasing the volume of loans, but in principle they cannot lend to those who have nothing to guarantee, they are renting and business costs them, he noted.
