Rising interest rates have intensified competition among financial institutions for deposits, while efforts to lock in affluent customers are also gaining ground. UI銀行, part of Tokyo Kiraboshi Financial Group, raised its one-year time deposit rate to 1.5%, and deposits exceeded ¥100 billion approximately one month after the campaign began.
Retail deposits, once viewed as a burden in the era of low interest rates, have become the focus of competition for deposits as the world of positive interest rates takes hold. Amid expectations of further Bank of Japan rate hikes and accelerating interest rate increases, banks are working not only to raise deposit rates but also to expand their overall customer services.
UI銀行, an online bank under Tokyo Kiraboshi Financial Group, is offering a campaign through the end of September that sets the annual interest rate on one-year yen time deposits at 1.5%. Deposits exceeded ¥100 billion approximately one month after the campaign began, and the campaign is seen as having benefited from the competitiveness of its rate.
The background includes strong funding demand from companies and other borrowers. Rising lending rates are improving profitability, while the value of deposits as a funding base supporting lending has increased further. Bank earnings are generally said to be driven by the spread between lending and deposit rates.