Express lenders increased deposit rates

Banks specializing in express lending have become leaders in terms of return on deposits. The maximum rates on deposits of HKF Bank and Russian Standard Bank increased to 12% per annum, which is currently a record. In conditions of instability of financial markets, these banks use deposits as a source of raised funds, and, unlike universal banks, express lenders can afford to pay dearly for citizens’ funds.

This week, several banks specializing in express lending announced an increase in rates on individual deposits. Thus, HKF Bank increased deposit rates by an average of 1-2 percentage points (pp), as a result of which the maximum return on its deposits increased to 12%. The maximum rates on deposits of Russian Standard Bank also increased to 12% (before the increase - 10.5% per annum). As a result, according to the information portal banki.ru, they became leaders in terms of deposit returns, surpassing even small regional banks in this parameter, which traditionally offered the most attractive conditions in the struggle for depositors. Slightly behind the leaders, but nevertheless offering a return significantly higher than the market (according to the Central Bank, the arithmetic average of the maximum rates on deposits of the ten largest banks in the first ten days of October was 8.14%) Bank Vostochny Express (according to banki.ru, the maximum rate on his deposits is 11.2%). Renaissance Credit has a maximum rate on deposits of 9.25% per annum, but, according to the chairman of the bank, Alexey Levchenko, in the near future it is planned to increase the return on deposits to 10% per annum.

Banks are seeking to diversify funding sources amid a difficult situation in financial markets. “The recent increase in rates is only the bank’s prompt response to rapidly changing market conditions and a protective mechanism against the flight of the population into foreign currency,” says Yuri Andresov, deputy chairman of the board of HKF Bank. Instability in foreign markets has already pushed up the cost of attracted resources. Thus, the average MosPrime rate on overnight loans, reflecting the situation on the interbank ruble lending market, has been 4.5% since the beginning of October, which is 67% higher than the level of January of this year, adds Vladimir Svinarenko, head of the foreign investment department of IFC Solid.

Deposit rates should not fall below 12%, otherwise depositors will withdraw money

— Alexey Kudrin, Deputy Prime Minister, Minister of Finance, November 26, 2008

This is not the first time that banks specializing in express lending have become leaders in terms of deposit returns. A similar situation was observed at the end of 2009, when, in the struggle for liquidity, they offered deposit rates of up to 17% per annum. As the situation stabilized, these banks lowered their rates, giving way to small regional banks.

In an unstable situation, it is natural for banks specializing in express lending to attract funds from citizens at higher rates, since they can afford it due to the high profitability of the business, says Tamara Kasyanova, general director of 2K Audit - Business Consulting. “Such banks have a very high net interest margin compared to the industry average,” adds Maxim Shein, investment strategist at BCS FG. “It reaches 30%, while for large universal banks the figure fluctuates in the range of 4-7%.”

At the same time, the degree of generosity of a bank that attracts funds from the population now directly depends on how important it is for it to refinance existing borrowings, notes Alexey Levchenko. The most pressing issue of borrowing refinancing is for HCF Bank. According to Cbonds, he will have to repay the bond issue for 3 billion rubles. already this month. Russian Standard has a little more time: to repay the bond issue for 5 billion rubles. The bank owes it in April next year. Renaissance Credit also has to repay a bond issue worth 3 billion rubles in April, but, according to Mr. Levchenko, only 1.18 billion rubles worth of bonds are in circulation. and the bank has enough liquidity to repay them: in June the EBRD opened a credit line for Renaissance Credit for 2.2 billion rubles, of which only 800 million rubles were drawn.

Ksenia Dementieva, Alexander Mazunin

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