2023-11-29 20:51:01
November 29, 2023 Today at 12:20 p.m.
Updated at November 29, 2023 4:17 p.m.
BNP Paribas Fortis offers 2.15% net on a 3-year bond. KBC is raising the rates on its 5- and 8-year term accounts to the same level as those on government bonds.
Government bonds face competition on all fronts. The two largest Belgian banks in terms of savings deposits launched offensives this Wednesday aimed at attracting individual investorsat the same time as the Federal Debt Agency is preparing the last government bond subscription campaign of the year.
BNP Paribas Fortis issued, on Wednesday, a bond whose yield is higher than that of these new government bonds. The bond of the country’s largest bank has a duration of three years and is accompanied by a gross interest rate of 3.75%, or 2.625% after withholding tax. But as this security is issued above its nominal value (amount which will be repaid at maturity), namely at 101.375% of this value, the effective yield is 3.261% gross and 2.147% net.
The BNPP Fortis bond is available for subscription until December 28 at 4 p.m., subject to early closing of this loan.
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5 and 8 year government bonds will yield 1.82% and 2.03% net
2,147%
Net return
The effective net yield of the 3-year BNP Paribas Fortis bond is 2.147%.
Same rates, same subscription duration
KBC also fought back against government bonds by announcing this Wednesdayof the 5 and 8 year term accounts offering interest rates identical to those of Belgian government securities, namely 2.6% at 5 years and 2.90% at 8 years. After withholding tax, the net returns amount to 1.82% and 2.03% respectively.
“In response to current market conditions and in order to offer customers a better return on their cash reserves which they can do without for longer, KBC, KBC Brussels and CBC are temporarily changing the interest rate on euro term accounts at 5 and 8 years old,” the group said in a press release.
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KBC’s offer is valid from November 30 to December 8 2023, i.e. precisely during the subscription period for government bonds.
When subscribing to the one-year government bond issued in September, the Belgians had invested 21.9 billion euros, including a good portion coming from their savings accounts. At KBC, this resulted in a drop of 5.7 billion euros in savings deposits.
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