Page 65 - RusRPTNov18

The September outflow of deposits from Sberbank took place against the background of statements by the head of VTB Bank Andrei Kostin that if a hard scenario of sanctions were implemented, in, which Russian state banks would be unable to carry out operations in dollars, VTB did not rule out the issuance of funds from such accounts in another currency as one of the options performance of their obligations to investors.
At the same time, at the end of August, the bank introduced a new seasonal currency deposit, which was valid until the end of September, with interest rates of 1.5–3% per annum (the maximum rate was offered to customers willing to place from $150,000 for three years). Now the maximum rate on dollar deposits at Sberbank is 2.06% per annum, while in a number of large banks (VTB, RSHB, Alfa-Bank, Rosbank) the rates on dollar deposits exceed 2.5% per annum.
Russia's two largest state-controlled banks Sberbank and VTB will keep on raising ruble deposit rates as of October 12, with some deposit plans promising more than 7%, Vedomosti daily reported on October 12 citing the announcements of the banks. This is the second wave of deposit rates hikes this year, as in August Sberbank increased its rates for both ruble and currency deposits for the first time since 2014. The bank holds almost half of all Russia's deposits. Retail deposits have been leaving banks in late summer on fears of another sanctions-induced crisis. Given the hike of the key interest rate by the Central Bank of Russia , deposit rates on average in Russia are expected to increase further by 0.5-1pp by the end of the year, the analysts surveyed by the daily believe. As of October the maximum interest rate for ruble accounts in top 10 Russian banks in terms of deposits portfolio amounted to 6.8%, according to the CBR.
Russian savings rate drops to the lowest level in 15 years. The rate of household savings (the ratio of personal savings to income) in August-September decreased to values significantly below the levels of 2013–2014, the Central Bank of Russia (CBR) said on October 30. In the first half of 2018, Russians used 5.9% of their income for savings, which is the lowest level in the last 15 years. The central bank says the change is indicative of a change in spending behavior where the population is gradually began to move from a savings mentality to a consumption mentality. There has been an increase in sales of non-food products, which the Central Bank explains as a reflection of continuing high inflation expectations. While the fall in savings trend looks unsettling the population financial position is still sound as retail deposit to loans ratio has remained at circa 200% all year and this year increased over the circa 170% it was at in 2017.
65 RUSSIA Country Report November 2018 www.intellinews.com