Making deposits in Russia of more interest
State giant Sberbank, that holds almost half of all individual deposits in Russia, says it will increase rates for some deposits and deposit certificates by up to 1.5%, with the highest to stand at 7.25%.
With the global financial instability, some of Russia’s smaller players started making their deposits more attractive in September, with the market average deposit rate among Russia’s top 10 players reaching 8.33% by the end of October. However, Sberbank made the sharpest move, which “confirms a general tense liquidity environment in the market,” Maria Kalvarskaya, TKB Capital analyst, told Kommersant newspaper.
Andrew Keeley, Troika Dialog analyst, wasn’t at all surprised by the news, saying “these increases… follow moves by many non-state banks to raise deposit rates in recent weeks, as liquidity conditions have become tighter.”
Being the heftiest market player, Sberbank has always served as a benchmark for its smaller competitors.
“In this turbulent environment, many were watching the behavior of the biggest bank. At first, rates were only raised by banks which couldn’t avoid doing this due to their liquidity level, but now other players will do it too,” forecasts Natalya Orlova, chief economist at Alfa-Bank.
VTB 24 and Russian Agricultural bank, ranked the country’s 4th and 5th for net assets accordingly, have already followed suit, with VTB 24 so far talking about a 0.5% rate increase, and Russian Agricultural bank announcing yesterday it has increased rates by up to 1.25%.