Deposit rates will fall more slowly than the key rate
After the Central Bank cut the refinancing rate to 4.25%, many financial organizations will reduce the profitability of deposits, but this process is unlikely to be abrupt. Mikhail Doronkin, head of the bank ratings department of the NKR agency, spoke about this in an interview with “Vedomosti”. He is confident that banks will gradually reduce rates, while monitoring the dynamics of the funds outflow. Doronkin also suggested that the level of deposits supply with increased profitability will grow in the market when opening an investment account or buying any investment tool.
Olga Ulyanova, an analyst at Mood’s agency, confirmed that the rate of decline in deposit rates will slow down at a slower pace. She also noted that some banks may slightly reduce the profitability of basic deposits, while others will keep rates at the current level. Banks should also be ready to launch new promotional deposits to raise new funds.
The average rate on deposits in Russia is currently about 4.5%, but it is gradually being adjusted towards the refinancing rate, said Maxim Timoshenko, head of the financial markets operations department of Russian Standard Bank.
When adjusting deposit rates, banks will be guided by the general market sentiment, representatives of VTB, MKB, Sovcombank, Uralsib and Raiffeisenbank said. The Rosselkhozbank press service noted that the decrease in the key rate was originally included in the current profitability of deposits, since the decision of the Central Bank was predictable. But the deputy chairman of Absolutbank, Anton Pavlov, called the reduction of the refinancing rate by 0.25% insufficient to subsequently change the rate on deposits.
Previously, Vedomosti analysts said that the largest banks began to reduce the profitability of deposits faster than money depreciates. Since the beginning of July, almost all of the thirty largest banks have cut rates on deposits, except for Gazprombank. In total, the profitability of deposits and deposits dropped by 1.3% – 1.9%.