Analysts at Citigroup said on Tuesday that Revolut, despite its 3.4 million customers in the Republic, is unlikely to prise much of the €170 billion in household deposits away from mainstream banks, which have been earning healthy returns by parking much of that money with the Central Bank of Ireland. “Despite this level of adoption, Revolut has yet to establish itself as the primary banking relationship for most Irish consumers,” they said in a report, noting that only 3 per cent of Irish customers use the neobank for their main current account. The 9 per cent VAT rate has been welcomed by restaurants but does the hospitality sector actually need it? Listen | 39:12,Citigroup also doubts that the Government’s planned savings and investment regime will persuade households to move en masse from savings accounts into stocks and investment funds. Banking & Payments Federation Ireland (BPFI) estimates that only €2 billion to €7 billion would likely be invested in the first year, even if the scheme is designed in a simple, accessible and attractive way. However, it also emerged on Tuesday that the European Central Bank (ECB) has designs on lowering the interest paid by euro zone central banks to commercial lenders. This may be done by doubling the level of minimum cash reserves that banks must hold with their domestic central banks from 1 per cent of their customer deposits and certain other short-term liabilities to 2 per cent. These minimum reserves do not earn any interest. The ECB and ‌the 21 national central banks of the euro ​zone are paying a 2.25 per cent interest rate on some €2.16 trillion worth of excess liquidity, resulting in annualised outlays of almost €50 billion. Irish banks have more central bank deposits than most European peers, relative to their size. Goodbody Stockbrokers analyst Denis McGoldrick estimated on Wednesday that a move to a 2 per cent minimum requirement would shave about €25 million off the annual interest income of AIB and Bank of Ireland and result in a €5 million hit for PTSB – all else being equal. “This translates into an [earnings per share] impact of circa 2 per cent for AIB and BoI and circa 5 per cent for PTSB,” he said. A decision on the matter will be made by the ECB in the autumn, according to Reuters.