No more bets: 14 Russian banks reduced deposit yields

Deposit rates in 14 out of 20 major Russian banks decreased by 0.08-0.75 percentage points from February 10 to 14. The decrease affected, among others, customers with premium subscriptions to ecosystem banking services. Details in the material "Izvestia".

Waiting for what?

Banks believe that the key rate will not be raised at the next meeting of the Central Bank, experts interviewed agree.

Moreover, in six months the Bank of Russia will begin to soften its monetary policy, according to Alexander Abramov, head of the laboratory for the analysis of institutions and financial markets of the IPEI of the Presidential Academy. "In this regard, rates have fallen primarily on short-term deposits," he says.

In addition to expectations related to the decision on the key rate, there are other factors that have affected the banks' policy in attracting funds from the population.

According to Valery Piveny, Managing Director, Head of the Financial Institutions Rating Group of ACRA, the need for regulatory liquidity, point preferences for certain categories of deposits, etc., also had an impact.

- The decline in rates may be related to the problems of some banks with the fulfillment of liquidity norms, which, among other things, provoked the growth of rates regardless of the dynamics of the key rate," he told "Izvestia".

The expert also noted that the change in rates was influenced, among other things, by the decline in demand for credit resources.

The peak of rates within the current cycle of tightening monetary policy in the country has already been reached, believes the analyst of FG "Finam" Igor Dodonov. At the same time, the expert attributes the greater reduction in short-term deposit rates over the past week due to the fact that they were lower than long-term. "Rates adjusted downward after the unexpected decision of the Central Bank to leave the key rate unchanged at the meeting on December 20," he says.

The most popular among Russians now are deposits for 3-6 months - in order not to lose out in case of increase in the key rate and deposit rates following it, says Associate Professor, Deputy Head of the Basic Chair of the Financial Market Infrastructure of the Faculty of Economic Sciences of the National Research University Higher School of Economics Andrei Stolyarov.

- Meanwhile, banks are also thinking about the cost of funding, which means that the current deposit rates are the maximum possible. Credit organizations are experiencing a heavy load due to accrued liabilities on deposits that are now expiring. And in the coming year this load will only grow, as it is necessary to pay up to a quarter of the attracted amount, - says the expert.

According to Andrei Stolyarov, also a significant factor was the decline in corporate lending in December 2024 - January 2025.

- Business can less and less afford lending at such rates and is trying to use other financial instruments, - he says.

Difficult inflation

Based on extrapolation of Rosstat data on accumulated inflation as of February 3 from the beginning of the year (1.3%) and from the beginning of the month (0.07%), inflation in January could be 1.23%. Based on the results of the week that accounted for the beginning of February, inflation in annual terms amounted to 10.14%.

After the price hike in early January, inflation has been clearly slowing down in recent weeks, approaching "normal" values: from January 28 to February 3, weekly inflation was 0.16% after 0.22% from January 21 to 27, 0.25% from January 14 to 20, 0.67% from January 1 to 13, according to FG Finam.

- Even taking into account the expected slowdown in monthly inflation rates with seasonal adjustment, we believe that the decline in inflation in annual terms will be slow, including due to the base effect and the upcoming indexation of utility tariffs in July. We expect annual inflation to peak around 10-11% in March-April. And it is unlikely to fall below 9% until August-September," forecasts Olga Belenkaya, Head of Macroeconomic Analysis at Finam.

In Russia in 2025 there will be powerful pro-inflationary factors, says Yulia Makarenko, deputy director of the Banking Institute for Development.

- Among them are very high government spending, the increase in the utilization fee, due to which the transportation costs of business and consequently the prices of goods are growing, the upcoming increase in prices for housing and utilities services in mid-summer by an average of 11.9%. Thus, despite the "softening" sentiment among market participants, this is more of a fatigue than a real forecast. The high key rate is with us for a long time. As well as deposits with yields of 20% and more," she commented.

According to her, we should not expect a significant reduction in the rate in the next year and a half. Against this background, financing of consumer sentiment and SMEs will also slow down.

According to Yulia Makarenko, the Bank of Russia managed to cool the real estate market, but this did not solve the problem of high inflationary expectations of the population.

- On the contrary, in anticipation of an even greater price hike, citizens are eager to spend right now, as they will not be able to afford the same purchase in the future. Hence the still impressive statistics on mortgages and loans taken. As a rule, these are the least protected segments of the population, who are forced to buy an apartment even at such interest rates right now, because they have nowhere to live. This is definitely not a story about investment," the expert summarized.

"Izvestia" sent inquiries to the Ministry of Finance and the Bank of Russia. The Ministry recommended to address the financial regulator. The Central Bank did not comment on the situation, referring to the "week of silence" before the next meeting to consider the key rate.