Record amounts of cash were withdrawn from Belgian savings accounts last year as savers attempted to boost their returns by investing in special one-year government bonds and other high-yield assets.
According to estimates published by De Tijd, a total of €31.5 billion was pulled from regulated savings accounts in 2023, bringing the total value of customers' savings deposits to €268.8 billion.
The withdrawn cash – equivalent to roughly 5.5% of Belgium's annual GDP – is the highest amount ever recorded since the National Bank of Belgium (NBB) began publishing statistics on customers' deposits in 2000. (The De Tijd estimates are extrapolated from NBB data.)
Making savings earn
Analysts attributed the stark decrease primarily to the issuance in August of the spectacularly successful "Van Peteghem" government bonds, which offered an effective yield of 2.81% – well above the savings rates offered by most commercial financial institutions. Nearly €22 billion worth of the bonds was eventually sold.
Evidence that savers were attracted specifically by the bonds' high rate of return is overwhelming: online bank MeDirect, which offers one of the highest savings rates in Belgium, saw its customer deposits increase by 50% to €2 billion last year.
Experts further note that it is unlikely that the massive withdrawals will trigger a liquidity crisis in Belgium's financial sector. Indeed, significant quantities of the extracted funds were actually re-directed into other financial assets and accounts held by Belgian banks.
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In particular, 2023 saw a significant rise in investments in term accounts, which offer savers a fixed rate of return for a fixed deposit over a set period of time. Deutsche Bank Belgium recorded a four-and-a-half-fold increase in investments in such accounts from 2022 to 2023.
Private bonds, too, fared extremely well: BNP Paribas Fortis, Belgium's largest bank, reports that its bond production increased fivefold in 2023.
A controversial issue
It is likely that billions more will be withdrawn from savings accounts over the coming months: Belgian Debt Agency Director Jean Deboutte announced last month that the Federal Government will issue a second round of high-yield one-year government bonds sometime in 2024.
Deboutte forecast that the sale could raise up to €13.5 billion for the Belgian State to finance its soaring budget deficit, which at 4.9% is one of the highest in the EU.
Interestingly, Deboutte's decision to issue the bonds contradicts explicit warnings by NBB Governor Pierre Wunsch, who noted in September that a second issuance "is not repeatable" as "the Treasury does not need so much money".
