Banks: surge in lending to households and businesses; mortgage rates remain stable
For households, this marks the eighteenth consecutive month of growth, whilst for businesses it marks the twelfth consecutive month of growth in lending
Key points
Loans to businesses continued to rise in June as well, with a 3.3 per cent increase – an acceleration compared with the 3 per cent rise recorded the previous month – continuing the upward trend in lending that began in March 2025. For households, this marks the eighteenth consecutive month of growth, whilst for businesses, it is the twelfth consecutive month of growth in lending. In fact, in May, loans to households rose by 2.6 per cent, whilst those to businesses rose by 3.5 per cent. This is according to the monthly bulletin from the ABI (Italian Banking Association) for the month of June.
Interest rates on mortgages and business loans remain stable
Interest rates have changed little, partly because the 0.25 per cent rate rise in June decided by the ECB had already been priced in by the market. The average rate on total loans (i.e. those taken out over the years) stood at 4.08% (+0.03% compared with the previous month); the average rate on new loans for house purchases fell to 3.48 per cent (-0.02 per cent compared with the previous month; it stood at 4.42 per cent in December 2023); the average rate on new business loans stood at 3.76% (+0.09% compared with the previous month; it was 5.45% in December).
The interest rate on accounts rises to 0.67%
The average rate on new fixed-term deposits (i.e. certificates of deposit and term deposits) maturing in June 2026 rose to 2.31% (+0.13% compared with the previous month; 2.18%) and was higher than the euro area average, which stood at 2.01% in May. The yield on new issues of fixed-rate bank bonds was 2.72%. The average rate on total deposits (certificates of deposit, savings deposits and current accounts) rose to 0.67% (from 0.65% in May 2026 and 0.32% in June 2022). The rate on current accounts rose to 0.31 per cent (up from 0.29 per cent in May)
Deposits remain high at 1,882 billion (but down on the record high)
Indirect deposits – that is, investments in securities held in custody by banks – rose by 105.8 billion between May 2025 and May 2026 (+46.2 billion from households, +15.8 billion from businesses, with the remainder coming from other sectors, including financial institutions, insurance companies and public administrations). Total direct deposits (deposits from resident customers and bonds) rose by 3.6 per cent year-on-year, continuing the positive trend recorded since the start of 2024 (+2.9 per cent in the previous month). Deposits, in their various forms, grew by 3.2% year-on-year (+2.7% in the previous month). The total value of deposits fell to 1,882 billion from the all-time high of 1,898 billion recorded in the previous month. Medium- and long-term funding, via bonds, as at June 2026, increased by 6.2% compared with a year earlier (+4.1% in the previous month).
Non-performing loans remain under control
In May 2026, net non-performing loans (i.e. the total of bad debts, probable defaults and past-due and/or overdrawn exposures, calculated net of write-downs and provisions already made by the banks) stood at €26.7 billion, down from €27.7 billion in December 2025 (€31.3 billion in December 2024). Net non-performing loans accounted for 1.28 per cent of total loans. This ratio was lower than in December 2025 (1.32 per cent; 1.51 per cent in December 2024).
