Banks plan to raise deposit rates — NBU
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The maturity of bank funding increased for the first time since the introduction of the survey in 2021, and this trend will continue in the next 12 months. At the same time, banks predict an increase in deposit rates. This is evidenced by the results of the quarterly survey of banks on funding conditions conducted by the NBU.
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“The average cost of funding in the first quarter of 2023, according to respondents, has increased. Financial institutions noted that since the beginning of the survey in 2021, deposit rates for individuals have been constantly growing. In the current survey, 93% of banks reported that they were attracted by the population, and this is a record value,” the message says.
Respondents still expect an increase in the value of clients’ funds in the II quarter, mainly for household deposits.
The price of wholesale financing, including the issue of bonds, attracting loans from international financial organizations (IFIs) or parent banks, long-term refinancing, etc., will also increase several times.
The NBU noted that the volume of bank funding increased in the first quarter as a whole. This is also evidenced by the results of the survey, however, estimates of growth in the volume of liabilities are more restrained compared to the record values of the IV quarter of 2022.
Factors of growth of clients’ funds
According to the respondents, the determining factors for the growth of clients’ funds were higher interest rates on deposits and regulatory requirements. Additional factors are business intentions to change the funding structure and proposals of the corporations themselves.
Banks in general expect growth in loans from both households and corporations in the II quarter, but the volume of wholesale funding will not change.
As for capital, its total volume has increased in the overwhelming number of banks over the past 12 months, while this trend is expected to continue in the next 12 months. About 80% of respondents noted an increase in the cost of capital in the last 12 months, but such an increase is not expected in the future.
Survey
The survey was conducted from March 17 to April 7, 2023 among bank managers responsible for managing liabilities. Answers were given by 26 financial institutions, the share of which in the total volume of assets of the banking system is 96%.
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News editor Roman Myronchuk writes on the following topics: Economy, finance, banks, cryptocurrencies, investments, technologies
Source: Ministry of Finance
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