The population is cashing out in droves

According to the reports of the Association of Ukrainian Banks, in October the population withdrew the lion's share of funds from current accounts in banks - more than UAH 6 billion, while the volume of time deposits even increased by UAH 864 million due to the devaluation of the hryvnia. Bankers hope that in the future the funds in current accounts will only grow, since the population has begun to leave some of the money withdrawn from deposits on them. However, the growth of the entire deposit portfolio will begin only if the hryvnia exchange rate stabilizes.

The Association of Ukrainian Banks (AUB) published the reports of 166 banks for October (in total there are 181 banks in the country; of the large credit institutions, only Prominvestbank does not provide reports to the AUB, which has introduced a moratorium on early repayment of funds since October 8). According to AUB, the population withdrew UAH 5.893 billion from their accounts. However, the outflow of funds practically did not affect time deposits. Under the conditions of the National Bank’s ban on early withdrawal of deposits from October 13, the volume of time deposits of individuals in banks increased by UAH 864.261 million.

As Kommersant predicted (see issue dated October 14), the massive outflow of funds affected current accounts - depositors took away UAH 6.758 billion. Money was withdrawn from accounts in almost all banks - of the credit institutions included in the top 20 in terms of the size of the population's deposit portfolio, only Ukreximbank and Forum showed growth in current accounts. As a result, the volume of demand funds decreased from UAH 39.573 billion to UAH 32.815 billion, and their share in the portfolio decreased from 20.87% to 17.86%. Due to massive cash withdrawals, many banks' liabilities have decreased (see table). Individuals most actively took money from Raiffeisen Bank Aval (-1.176 billion UAH), but this process hit Ukrsotsbank the hardest, which lost 12.4% of deposits (-952.068 million UAH). The top three is completed by Oschadbank (-836.243 million UAH). “People used to keep their salaries in current accounts, but now they are withdrawing them and trying to buy foreign currency,” explains Alexander Grishko, deputy chairman of the board of Oschadbank.

According to bankers, funds were also withdrawn from urgent accounts, and the increase in their volumes - according to statistics, to UAH 150.86 billion - was mainly due to the devaluation of the hryvnia in October by 18.5% (41.6% of deposits were denominated in foreign currency individuals). Most bankers claim that in November the population began returning money to banks, but not into time deposits, but transferring them to demand accounts. “There will be an increase in this item,” said Deputy Chairman of the Board of UkrSibbank Taras Kirichenko. “Many clients withdrew money from deposits and kept it at home or in safe deposit boxes for a month, which leads to additional expenses. After this, the question arises of what to do with it next ".

Bankers expect the public to place money in current accounts, since withdrawals from them are not subject to the moratorium on early closure of deposits. “In our bank, already at the end of November there was an increase in the current accounts of individuals, and at the end of December we expect an even greater increase,” says Taras Kirichenko. However, state banks note the opposite trend. “The decrease in current accounts continues, as pensioners take all the money,” says Alexander Grishko. “But we have a state guarantee for 100% of individuals’ deposits, so clients are not afraid to place money in urgent accounts.”

Bankers do not expect an increase in the liability base for the system as a whole any time soon. “Now the main question is not where to store money, but what to store it in: in foreign currency or hryvnia,” notes Alexander Grishko. “Until there is stability in the exchange rate policy and the problem with Prominvestbank is resolved, deposits will increase will not".

Ruslan Kommersant-Cherny

Money flows through checking accounts