Banks began to raise rates on deposits and accounts

Banks have so far responded with restraint to the increase in the key rate of the Central Bank; the average return on deposits of banks from the top 50 remains slightly above 11.2%. Although the largest players announced an increase in rates to the level of the key Central Bank and higher, this applies to individual deposits. Banks do not expect further radical actions from the regulator. Citizens will rush to take advantage of the opportunity, and by the end of the year, the volume of funds of individuals in the banking system may exceed 40 trillion rubles, which is higher than forecasts.

Banks began to raise rates on deposits and accounts following the Central Bank’s decision to immediately raise the key rate by 2 percentage points, to 15% per annum, on October 27. Today, the largest player, Sberbank, increased rates on a number of deposits, the maximum being 14% per annum. Its competitor, VTB, will raise the rate on savings accounts for new clients from November 1 from 13% to 15% per annum, but only for the first three months. Alfa Bank increases maximum deposit rates to 15%. Gazprombank announced that it is increasing the rate on the savings account – 15% per annum, on deposits the maximum rate will be 14%.

Earlier, a number of smaller players promised to increase rates. So, on October 28, Tinkoff Bank announced an increase to the maximum level of 14.1%. MKB, in turn, from October 30 began offering deposits for a period of three or six months with a maximum yield of up to 17%. Sovcombank also announced an increase in rates – from October 31 to 13.3%. Dom.RF Bank increased the maximum return on deposits to 14.5%, Uralsib – to 15.01%, HKF-Bank – to 14.75%. Absolut Bank’s maximum rates increased to 14%.

Banks have so far reacted with restraint to the increase in the Central Bank’s key rate to 15%. “Deposit rates are rising, but the growth rate is even lower than the previous week,” notes the analytical center of the Moscow Exchange’s Financial Services platform. Thus, compared to data from a week ago, the index of deposit rates in the country’s 50 largest banks increased by 0.08–0.12 percentage points, resulting in average rates of just over 11.2% per annum. “The real return on deposits in general is about 2 percentage points lower than the key rate of the Central Bank,” notes Anton Pavlov, deputy chairman of the board of Absolut Bank. “Banks offer maximum rates as part of marketing tools.”

Banks do not expect a further significant increase in the Central Bank’s key rate. “We are already close to the peak of the key rate,” says Uralsib senior analyst Irina Lebedeva. “But we can’t count on the fact that after reaching the peak of the key rate, the Central Bank will quickly begin to reduce it again. We believe that the Central Bank will keep the rate at peak levels for at least six months.” According to the chief economist of Zenit Bank, Marina Nikishova, by shifting the forecast range by 2 percentage points upward, the Central Bank once again confirms its intention to keep the key rate at an increased level for 3-4 quarters. Thus, it is likely that the monetary policy easing cycle will not begin until the third quarter of 2024. But the head of the analytical department of Rosselkhozbank, Alexander Fetisov, believes that it is too early to say that the key rate has reached its maximum value, “we allow it to increase in the future.”

“Increasing the attractiveness of deposits will certainly contribute to the flow of funds to banks after records for the volume of cash in circulation,” believes Ivan Uklein, director of banking ratings at Expert RA. “An increase in rates will allow the deposit base to grow also due to the capitalization of accrued interest.” NKR Managing Director Mikhail Doronkin believes that by the end of the year it is highly likely that the population’s savings activity will increase, including due to the fact that some citizens will postpone the decision to make large purchases on credit. There is no lack of liquidity in the system, but deposit rates will continue to rise until the end of the year due to New Year’s marketing activities, notes Gennady Fofanov, president of the InvoiceCafe investment platform. “I believe that the influx of funds on deposits can overtake forecasts and overcome the mark of 40–41 trillion rubles,” he continues.

According to Sovcombank chief analyst Natalia Vashchelyuk, there is not only an influx of money into banks, but also their redistribution from current accounts to time deposits. Banks’ net interest and fee income is likely to decline in the coming months, reducing their profits.

Ksenia Dementieva, Yulia Poslavskaya