Statistics of the banking system indicate that deposits of Ukrainians in foreign currency are declining.
Why is this happening?.
The banking business is not an a priori attraction of deposits, which decides what to do with the funds raised. This is primarily an understanding of the trends in the economy and the monetary system, an assessment of the possible volumes of issuing loans under such circumstances, an understanding of the dynamics of interest rates, a comparison of risks and the determination of the required volume of deposits and acceptable interest rates on them. In a good bank, depositors' money does not lie, but they work. If you simply raise funds, then this is a loss-making activity.
The key reason for the current outflow of currency deposits in foreign currency is not in the deposit, but in the credit sphere. Now banks do not lend much in foreign currency. The market for foreign currency loans to individuals does not exist, and the opportunities for lending to enterprises in foreign currency today are substantially limited by market realities. Accordingly, banks as a whole do not need large amounts of new deposits in foreign currency, and demotivate depositors with low rates.
The statistics of the banking system reflects not only a reduction in foreign currency deposits, but also a significant increase in the population's hryvnia savings in the banking system. If for the year deposits of citizens in foreign currency decreased by $ 400 million, in UAH they increased by almost UAH 19 billion. That is, in the end: in the last 12 months, the savings of Ukrainians in banks have increased significantly, and the return of deposits in the banking system has been going on for more than a year.
Why do today many people choose exactly hryvnia deposits instead of currency ones? Simple calculations with the eyes of the depositor. In Alfa-Bank Ukraine, the rate for an urgent annual deposit in foreign currency is now 5.5%, while in the hryvnia - almost 17%. That is, the hryvnia rate guarantees compensation for more than 10% of the potential appreciation of the dollar for the year. Now the hryvnia is practically unchanged (from the beginning of 2017 it even grew by 1%), and this year few expect a devaluation of more than 10%. Meanwhile, the interest rate on foreign currency deposits does not completely stop inflation. Accordingly, rational investors make a choice in favor of hryvnia deposits, because because of the small interest of banks in foreign currency, foreign currency deposits have become unattractive.
Do you still have to wait for the deposit today? Interest rates continue to decline. This applies to both hryvnia and foreign currency. Just that there was another decision by the NBU to reduce the discount rate, which confirms the direction of interest rates movement and sets further expectations. Conclusion: already in May-June is unlikely to bring money to banks at the same rates as today.
Which bank to choose? Despite the general trend towards lower rates, deposit offers from various banks are significantly different. For example, some banks with foreign capital offer investors less than 1% for foreign currency deposits and 10-10.5% for hryvnia. In contrast, Alfa-Bank is actively lending. Accordingly, our bank pays higher interest on deposits, because it has the ability to earn adequate money for its depositors through credit activity. At the same time, deposits in two banks with a difference of interest rates of 5-7 percentage points are equally reliable. In cases of very low rates, the key reason is not additional guarantees of reliability, but that such a bank is now simply inactive in lending.
After the so-called market cleansing and capitalization of banks, it is much easier for a depositor to decide on a placement bank: the largest banks passed stress tests and contributed additional capital. In a cohort of major financial institutions, unreliable banks have already left the market during the so-called purging of the banking system. And for responsible banks like Alfa-Bank, the attitude to their own depositors has always been and will be the highest priority. In our market, trust is the most important asset.