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The Deputy Chairman of VTB, said on the risk of return the situation with the deposits in the 1990s

Зампред ВТБ заявил о риске возвращения ситуации с вкладами в 1990-е

Real profitability of Bank deposits may soon not compensate losses from inflation, warned the Deputy Chairman of VTB. The consequence would be a repetition of the situation when the Russians did not consider the contributions seriously

The Russians may be disappointed in deposits as forms of saving money, the situation with deposits may go back to the mid 1990-ies, when they are not perceived as a source of augmenting savings. This was stated to journalists by the Deputy President and Chairman of the management Board of VTB Bank Anatoly Pechatnikov.

“Given that inflation is 4%, key [bet] — 4,25%, the yield of the underlying deposits — four, we certainly run the risk that we have a real yield of deposits with inflation will return to a situation of 1995-1996, when no one seriously deposits are not perceived as a source of savings and increase, because inflation exceeded the interest rate on deposits”, — said Printers.

In his opinion, if this situation continues, “people will look for alternative forms of Deposit savings.”

Printers also gave a forecast that the yield on savings accounts will shrink the same as the yield on term deposits. “The design of the savings account suggests a lower yield for the client because he is free at any time to either put or to withdraw money, unlike a fixed-term contract. I think, in September, rates on savings accounts will be reduced and will amount to 70-80% of the base yield term deposits”, — he said.

Central Bank of 4 August published the results of the July monitoring maximum interest rates on deposits in rubles in ten banks attracting the largest volume of deposits of individuals. In the first decade of July the maximum rate was equal to 4.63 percent, the second — 4,55%, in the third of 4.58%.

The Bank of Russia on 24 July, was lowered by 0.25 percentage points to a historical low of 4.25%. It was the third rate reduction since the beginning of the pandemic, but this time the regulator has lowered its not as dramatically as in previous times: March 19 — 0.5%, and 19 June — from 1 PP (new 2015).

 

 

 

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