Bank Austria Investment Barometer for the World Savings Day
Austrian investors slowly starting to invest in securities again
- Interest in securities slightly increasing for the first time since the crisis started
- Less assets for investment due to slow growth of income and paying off of debts
- Higher income levels can deposit more money again, lower income levels cannot do so yet
- Bank deposits remain preferred choice for saving, funds are returning, shares stable
More than 1.5 million customers will go to Austrian banks on October 30, primarily in order to receive information about the options for personal provisioning. For the first time since the crisis broke out, however, interest in securities is increasing again, which is a sign that confidence in markets is returning. These are the results of the latest Bank Austria Investment Barometer, a representative survey carried out by the GfK Austria market research institute commissioned by Bank Austria.
According to the survey, interest in the World Savings Day has grown. "We expect that our customers primarily intend to receive information about new products and their current assets this year," Rainer Hauser, Bank Austria board member, retail and corporate banking, explains.
Reasons for going to your branch on the World Savings Day
When asked about their reasons for going to their branch, 25 per cent of the persons questioned mentioned the presents. 27 per cent are accompanying their children or grand-children. 23 per cent go to their branch on the World Savings Day because it is a nice tradition. Nearly every eighth person questioned said the World Savings Day was an opportunity to get in touch with their personal consultant. 10 per cent want to deposit their savings on the World Savings Day. Among the reasons for savings and deposits, personal provisioning is the top priority for 63 per cent of the interviewees. 59 per cent say they are saving "for a rainy day", while 54 per cent are saving for their children. Both renovations and new furnishings represent a reason for 43 per cent of the persons questioned. Holidays and the acquisition of a car also represent a reason for the same number of people, with 42 per cent respectively.
Investors continue to invest in safe products – Securities experiencing growth for the first time since November 2008
When asked about preferred saving or investment products, 85 per cent of the persons questioned name one of the traditional products, such as savings books or building society savings. As compared to 2008, when these preferences still amounted to 78 per cent. As compared to the second quarter of this year (37 per cent), the percentage for real estates or property increased considerably, to 45 per cent. The share of people interested in provisioning with state incentives (33 per cent) and traditional life insurance (30 per cent) increased to 38 and 34 per cent, respectively. For the first time since November 2008, interest in securities has increased from 16 to 20 per cent again.
"This is certainly a good sign of stabilization and confidence in the market. On the whole, the limited fluctuations of the Investment Barometer during the last 18 months indicate that the crisis has affected customers far less than it was to be expected," Rainer Hauser concludes. This development was supported by fast reactions in economic policies.
Less money for savings due to slow growth of income and paying off of debts by households
In addition to the reasons for saving, Bank Austria has also taken a closer look at the development of saving behaviour of Austrian households, where differences between various income levels become evident especially during the crisis.
On average, Austrian households have less money available for saving in 2009 than in previous years, which can be explained by a slower growth of incomes and less new debts of private households. Growth of income is influenced by employment development. Bank Austria expects the employment rate to decrease by 1.9 per cent or 64,000 persons by the end of 2009. Therefore, available income will only increase by about 1 per cent in 2009, and consumption by about 0.5 per cent, per capita respectively. As a result, there would be more money available for provisioning. However, paying off of loans will be higher than new debt in Austria in 2009. "If the amount of new private loans remains at the same level as in previous years, about EUR18bn, repayment of consumer credits, on the whole, leads to the paying off of debts by private households," Mr Hauser continues.
When asked about their possibilities related to saving or investing, a small majority of Austrians (53 per cent) say that they cannot save as much as three years ago in the autumn of 2009. However, this share has decreased considerably as compared to 2008 (64 per cent). While people from all income levels have a more optimistic view with regard to their saving possibilities as compared to 2008, a stronger improvement can be observed among representatives of the highest income level. "The majority of people with higher incomes are able to save more or the same amount as three years ago, " it can be concluded from the results of the survey, while, "this is not true for people with a lower income level, even though an improvement as compared to 2008 has taken place." Only 13 per cent of the lower-income half households say they can save more money today than three years ago, while this share rises to 28 per cent among the top 30 per cent of income levels. 62 per cent (as compared to 68 per cent in 2008) of the lower-income half say that they can save less money than three years ago, compared to 40 per cent (50 per cent in 2008) among the higher income levels.
Bank deposits still preferred choice for savings, funds are returning but have not reached pre-crisis levels yet
The mood of investors also corresponds to the assumed development of asset investment in 2009, which will be below 2008 and 2007 levels with EUR169 per month and per Austrian, meaning that it will be at the same level as three years ago, according to predictions by Bank Austria experts. Naturally, investments are mainly influenced by higher income levels. This development also becomes evident in the distribution of assets as estimated by Bank Austria. About 50 per cent own only 10 per cent of assets, while 10 per cent representing the richest households own slightly more than 50 per cent of assets. On average, Austrian households have assets amounting to EUR70,000 (without real estates). Nearly 50 per cent of Austrians, however, have less than EUR45,000. 30 per cent have more than EUR90,000, while just 10 per cent own more than EUR225,000. Due to the uneven distribution of income and assets, it is mainly the behaviour of higher income levels that influences average results. Nevertheless, bank deposits are going to be the most popular choice for saving in 2009, and will also receive by far the highest new volume. "Out of EUR169 per month per Austrian, EUR119 will be paid into bank deposits in 2009," according to Bank Austria deputy chief economist Stefan Bruckbauer. Life insurance ranks second with EUR20. Bank Austria expects about EUR11 to be invested in shares, which therefore rank third among the most popular choices for investment in 2009, followed by bonds and funds.
Comparing today's investment behaviour with 2006, the last year before the crisis, and 2008, the peak of the crisis, the following conclusions can be drawn: It is well-known that bank deposits benefited from the crisis, with volume of new deposits doubling between 2006 and 2008. It is expected that the volume will still be above pre-crisis levels in 2009. During the peak of the crisis in 2008, demand for bonds was high. However, demand decreased in 2009 due to changing interest rates. Shares experienced an impressive development. While shares still only make up 7 per cent of new investments with EUR11 out of EUR169, they did not experience a slump even during the peak of the crisis in 2008. "During the last fifteen years, it was only in 2007 that more shares were sold than acquired, and the amount was even small in 2007," Mr Bruckbauer continues. Funds, however, recorded considerable outflows due to the crisis – both in 2007 and in 2008, regardless of price development. In 2009, however, it seems that funds record more inflows than outflows for the first time since 2006.
Enquiries: Bank Austria Pressestelle Österreich
Thore Dohse, Tel. +43 (0) 50505 - 52809
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