{"id":566322,"date":"2026-07-03T04:05:29","date_gmt":"2026-07-03T04:05:29","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/566322\/"},"modified":"2026-07-03T04:05:29","modified_gmt":"2026-07-03T04:05:29","slug":"ecb-plan-may-shave-millions-off-banks-interest-income-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/566322\/","title":{"rendered":"ECB plan may shave millions off banks\u2019 interest income \u2013 The Irish Times"},"content":{"rendered":"<p class=\"c-paragraph paywall \">Analysts at Citigroup said on Tuesday that Revolut, despite its 3.4 million customers in the Republic, is unlikely to prise much of the \u20ac170 billion in household deposits away from mainstream banks, which have been earning healthy returns by parking much of that money with the Central Bank of Ireland. <\/p>\n<p class=\"c-paragraph paywall \">\u201cDespite this level of adoption, Revolut has yet to establish itself as the primary banking relationship for most Irish consumers,\u201d they said in a report, noting that only 3 per cent of Irish customers use the neobank for their main current account. <\/p>\n<p><img decoding=\"async\" alt=\"\" class=\"c-image audio_image\" src=\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2026\/06\/1782638413_602_1754647931518-c07d65db-55b5-463e-ae51-976300c5837e.jpeg\"\/>The 9 per cent VAT rate has been welcomed by restaurants but does the hospitality sector actually need it?<\/p>\n<p class=\"c-paragraph paywall \">,<\/p>\n<p class=\"c-paragraph paywall \">Citigroup also doubts that the Government\u2019s planned savings and investment regime will persuade households to move en masse from savings accounts into stocks and investment funds. Banking &amp; Payments Federation Ireland (BPFI) estimates that only \u20ac2 billion to \u20ac7 billion would likely be invested in the first year, even if the scheme is designed in a simple, accessible and attractive way. <\/p>\n<p class=\"c-paragraph paywall \">However, it also emerged on Tuesday that the European Central Bank (ECB) has designs on lowering the interest paid by euro zone central banks to commercial lenders. This may be done by doubling the level of minimum cash reserves that banks must hold with their domestic central banks from 1 per cent of their customer deposits and certain other short-term liabilities to 2 per cent. <\/p>\n<p class=\"c-paragraph paywall \">These minimum reserves do not earn any interest. <\/p>\n<p class=\"c-paragraph paywall \">The ECB and \u200cthe 21 national central banks of the euro \u200bzone are paying a 2.25 per cent interest rate on some \u20ac2.16 trillion worth of excess liquidity, resulting in annualised outlays of almost \u20ac50 billion. Irish banks have more central bank deposits than most European peers, relative to their size. <\/p>\n<p class=\"c-paragraph paywall \">Goodbody Stockbrokers analyst Denis McGoldrick estimated on Wednesday that a move to a 2 per cent minimum requirement would shave about \u20ac25 million off the annual interest income of AIB and Bank of Ireland and result in a \u20ac5 million hit for PTSB \u2013 all else being equal. <\/p>\n<p class=\"c-paragraph paywall \">\u201cThis translates into an [earnings per share] impact of circa 2 per cent for AIB and BoI and circa 5 per cent for PTSB,\u201d he said. <\/p>\n<p class=\"c-paragraph paywall \">A decision on the matter will be made by the ECB in the autumn, according to Reuters. <\/p>\n","protected":false},"excerpt":{"rendered":"Analysts at Citigroup said on Tuesday that Revolut, despite its 3.4 million customers in the Republic, is unlikely&hellip;\n","protected":false},"author":2,"featured_media":552215,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[73],"tags":[624,625,79,2355,632,40851,18,9652,19,17,10927],"class_list":["post-566322","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-aib","tag-bank-of-ireland","tag-business","tag-cantillon","tag-central-bank","tag-citigroup","tag-eire","tag-european-central-bank-ecb","tag-ie","tag-ireland","tag-revolut"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116854071399640235","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/566322","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=566322"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/566322\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/552215"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=566322"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=566322"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=566322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}