The increase in the remuneration of the Livret A expected on August 1 will cost more than one billion euros to the banks. But at the same time, they also receive a commission from the state to manage your savings. Will they be losers or winners?
29.50 euros in interest per saver. In 2021, the Livret A report 1.64 billion euros to the French. What about banks? What profit do they derive, or not, from distributing the Livret A? Part of the answer can be found in the Savings Fund’s 2021 report. It is he, managed by the financial arm of the State, the Caisse des depots et consignations (CDC), which recovers 59.5% of the deposits placed by their bank customers on the Livret A. To put it simply, on 10 euros placed in a Livret A, 6 are entrusted to the savings fund and 4 are kept by the bank.
A commission that exceeds one billion
In total, the amount of centralized Livret A savings reached nearly 205 billion euros at the end of 2021. If we add the savings placed in the Sustainable and Solidarity Development Passbook (LDDS) and the People’s Savings Passbook (LEP) which also returns to the CDC, we arrive close to 300 billion euros managed by the savings fund.
In exchange for collecting and centralizing deposits from their customers, the banks receive a commission proportional to the amounts centralized in the Savings Fund: 0.3% for Livret A and LDDS, and 0.4% for LEP. Total payments to banks reached 1.25 billion euros in 2021, distributed according to the sums centralized by each of the establishments. In addition to these commissions, the Caisse des Dépts also bears the remuneration intended for savers (currently 1%) of the funds it centralizes, ie 59.5% of the total.
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For their part, the banks must therefore remunerate 40.5% of the deposits, those that they keep. And they must do so, since February 1, 1%, which is significantly more than the 0.09% they offer on average for their bank books.
Based on the Livret A outstanding figures at the end of May, the cost for the banks of the remuneration of the Livret A is 1.453 billion euros per year, according to the calculations of the economist Eric Dor. But the note should be dirtier from August 1 since the rate of Livret A was to double to 2%. The interest paid by the banks on the livret A will therefore be 2.906 billion euros per year, estimates the director of economic studies at the IESEG School of Management.
In this context, will the banks be out of their pockets to ensure the management of the Livret A? Not so sure. With the rise in interest rates on the financial markets, they will be able to use the resources of the Livret A to make loans at potentially higher rates.