The Measure of a Bank Is Its Deposits
Banks were unable to hold on to deposits in November. By November 25, they were down 0.2-0.5 percent, or about 27 billion rubles. State Duma member Anatoly Aksakov, who attended the National Banking Council meeting last week, stated that deposits were down 0.5 percent, while first deputy chairman of the Central Bank, Alexey Ulyukaev cited the figure of 0.2 percent at the Russian Economic and Financial Forum in Austria. Nonetheless, president of the Deposit Insurance Association Alexander Turbanov stated that there should be no net reduction in deposits for the months, and president of the Association of Russian Banks Garegin Tosunyan predicted a rise of 1 percent in the second half of at least the month.
The public began to withdraw its savings from banks in September, when deposits fell by 1.5 percent, or 88 billion rubles. The trend peaked in October, when 6 percent of deposits, or 346 billion rubles, were withdrawn. Sberbank saw withdrawals of 95.1 billion rubles in October, the largest outflow in absolute terms, at 3.2 percent of total deposits.
Sobinbank experienced the largest flux by percentage, when 43.5 percent, 13.4 billion rubles, of its deposits were withdrawn. It changed hands during the month and is now owned by Gazenergoprombank. Only 15 percent of deposits were withdrawn by the public at Sobinbank, however. The rest was taken out by corporate clients. Globex Bank lost 22.2 percent of individual deposits (5.4 billion rubles), and the Russian Development Bank lost 16.6 percent (6 billion rubles). Consequently, Globex was acquired by Vneshekonombank and Russian Development Bank by Otkrytie. Several banks, such as Ekonatsbank – which lost 25 percent of its deposits – and Mira Bank – which lost 15 percent – were unable to recover and were delicensed.
Several banks, such as VTB 24, Promsvyazbank, Home Credit and Finance Bank and Russian Standard, announced increases in interest on savings in an effort to retain savers. On Friday, Sberbank announced it was raising interest on savings 1-2.5 percent to 8.25-11 percent per annum. The Central Bank states that the average interest paid on savings in October was 6.4 percent, an increase of 8.4 percent over the previous month. By the end of the month, 10-12 percent was the norm for interest rates. Some banks, such as the Russian Development Bank and MDM Bank, offered special rates for the conversion of rubles savings to foreign currencies as well.
Individual banks experienced increases in savings in November. VTB 24 deposits were up by 2.6 percent, or 5.7 billion rubles. The trend continued, however. Experts predict it will stop in December, but deposits will not increase yet.
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All the Article in Russian as of Dec. 01, 2008
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