JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
Investing.com -- U.K. bank deposits increased by 0.2% month-over-month in May, with both sight and time deposits showing growth, according to Bank of England data analyzed by UBS.
The growth was primarily driven by household sight deposits, which rose 0.3%, while corporate sight deposits declined by 0.3%.
Time deposits increased by 0.3%, with cash ISAs growing 1.3%, offsetting declines in non-ISA household time deposits (-0.6%) and corporate time deposits (-1.2%).
Overall, household deposit volumes grew by 0.4% while corporate deposit volumes fell. The proportion of time deposits including cash ISAs remained stable at 33.6% of total deposits, following a significant 100 basis point increase in April.
Despite the Bank of England’s rate cut in May, the overall deposit rate in the U.K. decreased only slightly, falling 3 basis points to 2.20% from 2.23%. The deposit beta, which measures how much of the central bank’s rate changes are passed on to depositors, increased to 49.4% from 48.0%.
UBS noted that since rates peaked, banks have passed through about 30% of the 100 basis point policy rate reduction to depositors.
UBS maintains a positive outlook on the European banking sector, with a particular overweight position on U.K. domestic banks.
The firm cites attractive valuations, with UK domestic banks trading at 7.6 times 2026 estimated earnings and 1.2 times tangible net asset value for a 14.7% return on tangible equity.
The U.K. bank second quarter earnings season will begin with Lloyds Banking Group (LON:LLOY) on July 24 and conclude with Standard Chartered (LON:STAN) on July 31.