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Western Banks Lose Their Savers
The Deposit Insurance Agency published an overview of the individual savings market for the third quarter of this year. For the first time in several years, the rate of growth of savings in foreign banks has fallen below the average for the banking system as a whole. That indicators for foreign banks was over twice the system-wide average last year. Savings in mid-size banks that offer income over the Central Bank discount rate have increased dramatically. Analysts say that depositors are once again oriented toward maximum return, rather than maximum dependability, which presents a danger to the liquidity of those banks.
Analysts suggest that the cause of the slowdown in the growth rate of savings in the Russian subsidiaries of foreign banks is the reductions of the interest rate on deposits in banks of the Raiffeisen Group, which is the market leader in Russia in that segment of the market. Raiffeisenbank and Impexbank together account for about 70 percent of savings in foreign banks. Savings in Raiffeisenbank grew by 60 percent last year, experts estimate, but only by 30 percent in the first three quarters of this year. In the third quarter of the year, that growth reached only 3 percent. Citibank and the International Moscow Bank also noted sharp reductions in savings growth.
Rus Bank marketing director Dmitry Yurtsvaik noted that the interest rate on ruble deposits is around 9 percent in Russian banks and 7 percent in foreign banks. Hard currency deposits earn about 6 percent in Russian banks and 4 percent in foreign banks. Thus, foreign banks' interest rates are uncompetitive. This is because Western banks are developing crediting rather than depending on depositors, according to Rusrating analyst Viktoria Belozerova.
The Deposit Insurance Agency noted the presence of “a small group of banks with growth rates over 50percent among the most aggressively growing banks.” The agency concludes that a number of small banks with aggressive interest policies may soon become major players on the banking market. Head of the business development department of the Bank of Moscow Albert Andrianov warns, however, that those policies carry dangers because those small banks may find themselves unable to pay the promised interest.
www.kommersant.com
All the Article in Russian as of Dec. 20, 2006
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Photo: Ivan Makeev
