# Analysis of the Market of Households’ Deposits for 2017

Date: 05.03.2018

The State Corporation Deposit Insurance Agency (DIA) has analyzed the development of the market of households’ deposits in 2017. Here are the most significant trends.

**Individuals**’ **Savings Activity**

The amount of bank deposits of individuals increased by 1,787.1 billion rubles (in 2016 — by 981.2 billion rubles) up to 25,987.4 billion rubles. In relative terms, the growth was 7.4%, without currency revaluation - 8.6% (in 2016 - 4.2 and 9.2%, respectively).

Investments into uninsured bearer savings certificates decreased throughout the year. As the result, funds invested into such certificates decreased by 97.6 billion rubles (20.1%) down to 387.7 billion rubles. The share of bearer certificates in total deposits also decreased making 1.5%.

The amount of funds of individual entrepreneurs with the banks as of January 1, 2018 was 459.5 billion rubles (1.8% of the total amount of deposits of individuals) with 36.2% increase from the beginning of the year. The amount of insurance liability to them is estimated as 265.1 billion rubles or 57.7% of the total amount of deposits of individual entrepreneurs which is comparable with the structure of deposits of individuals.

In general, the amount of insured household deposits with banks (including deposits of individual entrepreneurs) in 2017 increased by 2,012.4 billion rubles (in 2016 - by 1,130.7 billion rubles). In relative terms, it showed growth of 8.4% up to 26,033.0 billion rubles (in 2016 — by 4.9%).

Dynamics of daily increases in deposits in 2017 was as follows. In January–November of 2017 the growth of deposits averaged 2.4 billion rubles per day, 3.0 billion rubles per day without currency revaluation (1.4 billion rubles per day in January-November of 2016, 3.8 billion rubles per day without currency revaluation). Traditional Pre-New Year bonus payments and other additional remunerations resulted in large increase in the deposits. Deposits of individuals grew by 990.5 billion rubles in December (by 32 billion rubles per day on average) which after currency revaluation exceeds a little the Pre-New Year deposit inflow in December of 2016.

**Deposit Distribution by Size**

Deposits close to the maximal size of insurance coverage demonstrated the most active growth in the reporting year. Thus, deposits from 1 million to 1.4 million rubles increased by 21.1% in terms of amount and by 20.9% in terms of the number of accounts, and deposits from 1.4 million rubles to 3 million rubles increased by 23.2% in terms of amount and by 22.9% in terms of the number of accounts. Deposits from 3 million rubles to 5 million rubles increased by 9.9% in terms of amount and by 9.1% in terms of the number of accounts. Deposits amounting to over 5 million rubles increased by 2.2% in terms of the amount and by 8.0% in terms of the number of accounts.

Deposits from 100 thousand to 700 thousand rubles and from 700 thousand rubles to 1 million rubles increased by 6.5 and 7.3% in terms of amount and by 6.6 and 7.2% in terms of the number of accounts, respectively.

During the year, the share of deposits from 700 thousand rubles to 1.4 million rubles increased from 19.5 to 20.7%, the share of deposits from 100 thousand to 700 thousand rubles and over 1.4 million rubles decreased from 29.5 to 29.0 and from 41.6 to 41.1% of the total deposit amount, respectively. The specific weight of deposits with balances less than 100 thousand rubles changed insignificantly.

Average deposit amount in the banking system (without accounts below 1 thousand rubles) amounted to 159.1 thousand rubles.

**Deposit Profitability and its Impact on Deposits Dynamics**

Monitoring of interest rates offered by 100 largest retail banks carried out by DIA showed that most of them (72 out of 100 banks) decreased deposit interest rates in 2017. In 13 banks the interest rates increased and in 15 they remained unchanged.* *Main decrease in interest rates was observed in H1 2017.

The average level of (deposit-amount-weighted) interest rates as of January 1, 2018 on ruble deposits amounting to 1 million rubles fell by 1.0 p.p. from 7.4 to 6.4% per annum. Average (unweighted) interest rates on similar deposits decreased by 1.2 p.p. from 8.5 to 7.3% per annum.

According to DIA estimates, a small decrease in interest rates on deposits will persist during the current year. At that, the actual return on deposits (as compared with the inflation rate) will remain positive.

**Deposit Distribution by the Currency and Term**

In 2017 the share of foreign-currency deposits decreased from 23.7 to 20.6%. This share decreased both as the result of ruble depreciation and due to low interest rates on foreign-currency deposits.

In connection with higher level of interest rates on short-term deposits (less than 1 year), their share increased insignificantly from 35.2 to 37.8%. There was simultaneous growth of share of call deposits from 18.3 to 21.0%. At that, the share of long-term deposits (more than 1 year) decreased from 46.5 to 41.2%.

**Deposit Market Concentration**

In 2017, the share of 30 largest banks in terms of deposit amount increased from 85.2 up to 87.0%, while the share of PJSC Sberbank decreased from 46.5 to 46.1%. Gradual growth of share of the largest banks continues from the end of 2013 - total increase for the period is more than 10 p.p.

**DIA**’**s Insurance Liability**

The amount of the DIA’s insurance liability (covered deposits) in 2017 increased from 67.8 to 69.2% of eligible deposits. Without factoring in PJSC Sberbank - from 61.8 to 64.1%.