According to the CBR, for 11-20 September the maximum average retail deposit rate for the top ten retail deposit taking banks was 10.53%, flat from the first ten days in September. The regulator also said that starting October 2012, the published statistics would not include interest rates for combined deposits ( i.e. those that offer insurance contracts or investments in mutual funds). Under the new methodology, the interest rates in the first two periods of September were at 9.35%.
Further to that, the CBR’s upper limit for deposit rates moved to 200bp over the new average interest rate calculated on a monthly basis, from 150bp used before.
The high deposit rates signal further pressure on banks’ margins in 2H12, while the CBR’s recent hike in interest rates will keep them at an elevated level, in our view. Even though the new methodology implies a lower level of interest rates, we do not expect this to change the picture significantly, as the cost of funding stays high and more consumer lending banks (which can offer expensive deposits due to their higher margins) are able to enter the Top 10. Given the lower base, the change in the upper limit of deposit rates would optically push this limit down temporarily. In 2H12, we still expect NIM to rebound amid a re-pricing of assets, although the high cost of funding will limit the upside, we believe.
Mikhail Shlemov, Svetlana Aslanova
VTB Capital analyst
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