The share of long-term deposits in 2023 increased fivefold at VTB
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According to VTB, one of the largest players in the retail deposit market, at the end of last year the share of deposits with a maturity of three years or more reached 25% in the total volume of time deposits of individuals at the bank. Over the year, it grew fivefold from 5%, with the main increase occurring at the end of the year (September-December), when, following the Central Bank, banks increased the yield on deposits.
VTB told Kommersant that citizens have significantly increased the demand for long-term deposits. According to the head of the Savings department of the bank, Natalya Tuchkova, from the second half of 2023, retail clients began to extend the terms of their liabilities, but the main growth began in September. As a result, if at the beginning of the year almost 60% of ruble deposits in VTB were placed for a period of six months, then by the end of the year their share dropped to 34%. “At the same time, interest in long-term products has increased: over the year the share of three-year deposits increased from 5% to 25%,” she cites the data. “The expected reduction in the key rate in the second half of 2024 will support the demand for long-term products.” At current levels, the yield on savings products will last at least until mid-February, when the next meeting of the Central Bank on the key rate will take place, according to VTB.
According to Central Bank monitoring data, the arithmetic average of the maximum rates of the top 10 banks on deposits amounted to 14.79% at the end of the third ten days of December. At the end of the year, this indicator reached a more than one-and-a-half year high since April 2022.
Kommersant interviewed the largest players in the deposit market, but they were promptly unable to provide data on the share of long-term deposits of individuals. According to Central Bank data published on January 16, a slight increase in deposits is also observed: in November, the share of individual deposits for a period of six months to a year in the total volume increased by more than 9 percentage points and exceeded 40% for the first time since February 2022.
According to the head of the ACRA financial institutions ratings group, Valery Pivny, the increase in the term of placed deposits may reflect the desire of depositors to secure the profitability that has increased following the key rate. The Central Bank began the cycle of increasing the key rate in July 2023, when it was at the level of 7.5% per annum. But it showed maximum growth in the second half of August, increasing from 12% to 16%. “The growth in the share of long-term deposits can theoretically be explained by the desire of depositors to thus create an untouchable cash cushion for the future, given that the regulator’s monetary policy significantly changed the key rate,” notes Gennady Fofanov, president of the InvoiceCafe investment platform.
Mr. Fofanov does not consider a significant increase in long-term deposits attracted at high rates to be critical for banks’ profitability: “The bank, due to the growth of long-term deposits, also receives additional benefits from internal monetary transactions.” Credit institutions in general are able to manage the margins of products and, most likely, make the necessary changes to the policy for the placement of attracted resources, agrees Valery Piven.
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