Households appeared to be saving more in the first two months of this year, with bank deposits growing sharply, according to data by the Central Bank of Malta.

The bank said in its latest issue of the Economic Update that during the 12 months to February, residents’ deposits held with monetary financial institutions increased by 2.5%. This was the third consecutive month with year-on-year increases, following a period of declines in the final months of 2023. The latest increase was mostly driven by balances belonging to households, the Crentral Bank said, adding that deposits belonging to financial intermediaries and non-financial corporations decreased. 

The bank also reported that time deposits with agreed maturity of up to two years – the second largest deposit category – continued to show very strong growth at the beginning of the year. They rose by 24.2% over the year to February, though less than the 31.7% recorded in the year to January.

"This marks the sixth consecutive period with double-digit growth and reflects more attractive terms on fixed deposit accounts by certain credit institutions. The latest increase was driven by higher balances belonging to households, as balances held by non-financial corporations increased to a lower extent," the bank said.

Credit to Maltese residents grew by 5.9% in February, higher than the 5.6% growth recorded in January. Credit to general government fell by 0.2% over the 12 months to February, following a 2.2% decrease a month earlier.

At the same time, annual growth in credit to residents outside general government increased by 8.1% in the year to February, below the 8.3% recorded a month earlier.

The annual rate of change in loans to households reached 9.1% in February, up from 8.5% in the previous month. Growth in mortgage lending stood at 8.8%, compared to 8.2% recorded in the year to January. Furthermore, growth in consumer credit and other lending increased by 11.7% year-on-year