Page 62 - RusRPTNov18

in the last ten years.
The Central Bank of Russia (CBR) has conducted preliminary results for the banking sector for nine months. By October 1, the volume of funds of individuals in the banking system amounted to RUB26.9 trillion (taking into account currency revaluation), an increase of only 3.5% since the beginning of the year. At the end of August, the picture was much more positive - an increase in individuals' funds in the banking system by 5.3%. In September, the net outflow of public funds from banks amounted to RUB496bn.
Without taking into account the currency revaluation, the flow of citizens' funds into the system for the first nine months was even lower - only 1.7%, while the negative dynamics was observed in August (–0.6%) and in September (–0.8%).
Even the actions of state-owned banks to raise interest rates on foreign currency deposits did not help, but a slight increase in the maximum rates on ruble deposits of the largest banks — from 6.3 to 6.7% in August-September (according to monitoring by the Central Bank).
Russian banks named in the new sanctions bill include: Sberbank, VTB, Rosselkhozbank, Promsvyazbank, Vneshekonombank which have settlements in US dollars blocked if the bill passes in its current form.
The situation was aggravated in September by statements by VTB President Andrei Kostin. Trying to reduce the passions, he assured that "all customers of all banks will be able to get their money back." But the following reservation “how it will be done, in what currency is another question” gave new reasons for speculation.
The CBR is not panicing. “This tendency to decrease deposits, which you noticed in August-September, is short-term, in our opinion,” said Deputy Chairman of the Bank of Russia Vasily Pozdyshev on October 9. “We expect growth in household deposits in banks in the next quarter.” At what level, he did not specify, the Central Bank did not answer the question whether the regulator intends to change its forecast. It was presented back in May - a growth in deposits of 7–9% for the year, but “closer to 9%”.
“An annual growth of 2–2.5% is more realistic given the currency revaluation,” one economist said. “Even if banks continue to raise interest rates on deposits, the population is too depressed by the decline in real incomes and the possible depreciation of the ruble, as well as rumours about new sanctions.” Against this background, people prefer to make savings in the form of a multi-currency basket, and in cash, the expert concludes.
The previous lowest result was recorded in 2016 - 4.2%, taking into account the currency revaluation, according to the Central Bank. However, all the experts agree that even if inflows fall to new record lows this does not present a danger to the banking sector.
62 RUSSIA Country Report November 2018 www.intellinews.com