Sovcombank is ready to accept deposits in euros at a rate of 1.6% per annum

An unexpected offer appeared on the foreign currency deposit market. One of the largest players, Sovcombank, is ready to accept deposits in euros, which recently had virtually zero profitability, at a rate of 1.6% per annum. Considering the bank’s long-standing sanctioned status and the inability to pay in European currency, the product raised questions among experts and market participants. First of all, they interpret the situation as a solution to “private problems of VIP clients” and do not expect similar steps from other major banks.

Sovcombank, included in the list of systemically important credit institutions (SZKO, 13 largest banks), announced the launch of annual deposits in euros with a rate of 1.6%. According to the financial marketplace Banki.ru, currently not a single bank among the North-West Banks offers higher returns on deposits in European currency. The second result by a large margin is for MKB – 0.6% per annum, in third place is RSHB – 0.5%. The rest of the SZKO banks have rates on deposits in euros of less than 0.01% or none at all.

On the market you can find offers with higher returns on deposits in euros than Sovcombank, but only from small players. The only relatively large bank that offers high returns on deposits in European currency is Ak Bars – 3.3% per annum; it has a comparable level of return on dollar deposits – 3.5%. According to market participants, the bank, which came under US sanctions in mid-September, is trying to minimize their consequences with increased rates, in particular, the outflow of citizens’ foreign currency funds.

At Sovcombank, the introduction of deposits in euros with returns significantly higher than those of other major players was explained by concern for clients. “We are creating the widest possible product line that takes into account all the needs of clients,” said Anna Kambulova, managing director of the bank. At the same time, she emphasized that it is important not to forget “about the regulatory restriction on the withdrawal of cash from accounts and deposits.”

The euro is not the most popular currency in the Russian Federation. Even at a time when the American and European currencies were not toxic, the euro accounted for less than 30% of all foreign currency deposits, Kommersant’s interlocutors note. In total, according to the Bank of Russia, as of August 1, 2023, citizens held over 4 trillion rubles in accounts and deposits with banks. currencies in ruble equivalent.

Various reasons may contribute to the growth of rates on deposits in euros, notes Ilya Zharsky, managing partner of the Veta expert group. For example, he clarified, in this way the bank can accumulate appropriate liquidity or attract free funds from the population. However, the expert admits, the very purpose of such a decision remains unclear – “after all, now the currency does not carry any practical value, and sometimes even entails onerous conditions.”

Considering that Sovcombank is under sanctions and cannot pay in foreign currency, payments on obligations denominated in euros, for example, Eurobonds, will be made in rubles. Kommersant’s interlocutor from among the financiers believes that the bank attracts euros for a specific Russian client. “Perhaps one of the borrowers needs a significant amount in euros, or there is a request from a VIP client of the bank for a profitable placement of funds,” explains Kommersant’s source.

In any case, “this is not a market story,” Kommersant’s interlocutors are sure. “I don’t think that this trend will be widespread,” adds Ilya Zharsky, explaining that it is now important for banks to attract liquidity in the national currency “due to regulatory circumstances.”

Ksenia Dementieva, Olga Sherunkova