Šiaulių Bankas has already attracted deposits for more than EUR 6.5 million in Germany
Using the virtual financial services platform Raisin, Šiaulių Bankas has concluded term deposit agreements for more than EUR 6.5 million in the German market a little over a month.
"The launch of a collaboration with the Raisin platform surpassed expectations, and we have received a great deal of interest from depositors residing in Germany who entrust their savings to our bank. We are glad that, unlike in Lithuania, German depositors are more likely to place deposits for a longer term,” - said Director of Markets and Treasury Department Tomas Varenbergas.
The first results of the cooperation with Raisin showed that the saving habits of the German and Lithuanian people differ. The German residents tend to choose not only 1-year deposits and then keep extending them, they immediately place deposits for a 4 or even 5-year period which cannot be terminated prematurely without a significant cause. In Lithuania deposits of such duration account for a very small part of the deposit portfolio.
In Germany, interest paid for 1-year deposit reaches up to 1.25 per cent when in Lithuania the largest banks offer up to 0.7 per cent. Meanwhile, long-term deposit interest rates for depositors in both Lithuania and Germany are similar - up to 2 per cent interest is paid for a 5-year term. According to T. Varenbergas, the bank is pleased to note that the clients of the Raisin platform, when considering the deposit offer from 78 banks participating in the platform, choose Šiaulių Bankas. Insurance of deposits up to EUR 100 thousand applies to the German depositors, whereas the creditability of Šiaulių Bankas is endorsed by the international rating agency Moody’s that recently increase the deposit rating up to Baa2.
The deposit market is globalised at a fast pace - financial institutions no longer need any physical branches or divisions to provide services abroad. It is enough to get a local regulator's permission and have own or partner's IT solution for the service. Started collaboration with the Raisin platform has opened the gateway for Šiaulių Bankas to the global and much larger market for savings services. For comparison, according to the data of the Bank of Lithuania, deposits of non-financial companies and households in April 2019 amounted to nearly EUR 14 billion, while deposits of non-financial companies and households in Germany amounted to nearly EUR 2.3 trillion.
Currently, the Raisin platform is used by over 180 thousand German residents. Opportunities for development on this platform are high - deposits can also be offered to the residents of Austria, France, the UK and Spain.
"Lithuania will remain the main deposit market for us, however, in the future the scope of this alternative financing source will depend on the bank's liquidity ratios, the growth of the balance, interest rates in different markets and on other factors searching for flexible financing solutions," said T. Varenbergas.