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Klondike for deposit hunters
The average maximum interest rate on deposits in Russia's largest bank has exceeded 20% per annum for the second time in its history. Experts believe that the historical record will be broken in early November, will be exceeded by several percentage points by the end of the year, and during the pre-New Year marketing campaign, rates may even reach 30% per annum. The largest credit institutions that are able to raise interest rates against the backdrop of cheaper debt remain the winners, while smaller banks are effectively dropping out of the race for depositors, including by curtailing lending activity.
On October 3, 10, 2024, the average maximum interest rate on deposits in large banks reached 20.17% per annum. Only in the first 10 days of March 2022 was it higher than this figure (20.51% per annum). This is evidenced by data from the Russian banking sector, published in early November. This is how banks responded to the increase in the base interest rate (by 2 percentage points at once, 21%), adopted by regulators at the end of October. Since the beginning of the year, the average interest rate on deposits has increased by 5 percentage points, and over the past two months it has increased by 2.7 percentage points, given that the central bank will not stop raising the base interest rate. The growth of deposit rates will continue and may break the 2022 records as early as early November.
At the same time, the largest banks remain the winners. Thus, according to the report, as of October 1, 2024, the three largest credit institutions accounted for more than 80% of all funds received from citizens, each of which grew by more than 100 billion rubles in a month. (See Kommersant, October 31). At the same time, they have the opportunity to attract deposits at high interest rates, having stipulated special conditions - new money, payment of a certain amount by card, etc. Igor Alyutin, Senior Managing Director for Retail Business at Moscow Exchange, commented on the situation with large banks. With several salary projects, not only does a significant amount of conditionally "free" debt arise, but there are also more opportunities to ensure liquidity. According to Alexey Voylyukov, professor of MBA practice of digital finance at RANEPA, the real level of debt retention is about 14-15% per year. Therefore, they can confidently offer high interest rates on short-term deposits to withstand the competition.
However, many smaller banks offer higher interest rates.
As Mr. Alyutin noted, according to the Financial Services Market Deposit Index, spreads in early November ranged from 0.16 to 1.99 percentage points compared to the average interest rates of the top 50 largest banks. However, experts believe that smaller credit institutions have lost the race to attract depositors. At the same time, they do not need to attract large amounts of funds. “Most of these banks are captive banks or banks focused on specific projects,” said Timur Aitov, a member of the RF CCI Committee on Financial, Industrial and Investment Policy. They offer good conditions to employees for some large corporate clients, but “this is more of a loyalty program than an attempt to find funds,” explains Alexey Voylyukov.
As short-term liquidity standards tighten, banks must attract long-term deposits, but analysts explain that depositors prefer short-term deposits. Kirill Klimentyev, an analyst at the investment company Digital Broker, noted that the observed increase in the proposed interest rate occurred because people believed in a further increase in the base interest rate and opened only short-term deposits in order to earn money later. Otkritie at a new pace.
At the same time, according to his estimates, if the base interest rate is increased to 23% per annum, the rate on deposits in large banks will grow to 22-24% per annum depending on the period. Alexey Voylyukov believes that with the launch of New Year's promotions, interest rates of 25% per annum will become commonplace in most credit institutions, and for some market participants, as part of marketing promotions, the interest rate may reach 30% per annum.