AUB partners news

In the period from September to December 2024, the inflationary “burden” is projected to be within 5-6%. And given the current deposit rates, citizens can not only save their funds from depreciation, but also receive at least 3-4% of net profit.

This was told by Dmytro Zamotaev, Director of Retail Banking Department of GLOBUS BANK.

However, the expert believes that in September there may be a "transitional period" — adaptation of citizens to new economic realities (to a gradual increase in consumer prices in the range of 5-7%). "Therefore, behavioral inertia is possible and, as a result, the increase in the number of new depositors will amount to only 1%," the banker emphasized.  
The specialist noted that in September, compared to August, the average return on hryvnia deposits generally does not undergo significant changes. Yes, the return on deposits with a term of 3 months or more. up to 6 months will be 10% per annum, average interest rates on deposits from 9 months. up to 12 months will give an income of 11-12% per annum. The highest profit is possible on long-term deposits - from 1 to 2.5 years - on average up to 12-13% per annum. At the same time, as the specialist claims, the average yield on foreign currency deposits will remain constant: the average rates on deposits in dollars will not exceed 1.5% per annum, and in euros - 1.3% per annum. "Thus, the net profit from the shortest hryvnia deposits (from 3 months to 6 months) will almost triple the income from currency deposits, which significantly increases citizens' interest in hryvnia deposits," he emphasized.

Dmytro Zamotaev pointed out the factors that can affect the rate on hryvnia deposits in September:

• The amount of the discount rate and the rate for 3-month deposit certificates as the main source of formation of deposit yield. Currently, the discount rate is fixed at 13%, and the rate for 3-month decertificates is 16%. When reviewing these important economic indicators, the deposit rate is adjusted.
• Inflation rates. Under an optimistic scenario, if inflation in 2024 is lower than the announced forecasts of 8.5%, the profit on hryvnia deposits may indirectly increase.
• Controlled / stable situation on the foreign exchange market. At the end of the year, it is expected that the dollar exchange rate will be at the level of UAH 42.1 / $. In September, the permissible and forecast devaluation of the hryvnia may amount to 1-1.5%, and exchange rate fluctuations may occur in the corridor of 41-42 hryvnias / $.   
• The economic situation in the country in the context of a long war. In particular, the impact of possible power outages on business activities, the level of consumer prices, the volume of this year's crops of grain and other agricultural crops, the demand for numerous state credit programs that stimulate the development of small and medium-sized businesses, etc.

Dmytro Zamotaev,
Director of the retail business department
GLOBUS BANK

"Currently, the economic factors that directly or indirectly affect the activity of banks and, in particular, the development of deposit programs, are not threatening. For example, joint-stock banks are now actively competing for depositors, launching deposit programs with the most attractive conditions for customers. That is, there are no hints of the curtailment of programs or a significant reduction in the yield of hryvnia deposits. In addition, the tendency to reorientation from ultra-short deposits to longer ones (up to 2.5 years), whose yield is on average 50% higher than ultra-short deposits, is gradually gaining momentum," the expert argued. — аргументував експерт.

He also answered the question of whether there is a risk of mass outflow of money from hryvnia deposits. According to the banker, as of mid-August, the ratio of hryvnia and currency deposits is 80% versus 20%. That is, as the expert emphasized, hryvnia deposits dominate and it is unlikely that this ratio will change significantly in the next 3-4 months.
However, Zamotaev does not rule out that in September-October the share of hryvnia deposits may decrease somewhat - by 3-5% compared to August.

According to him, there can be two main reasons:

• the scheduled end of deposit terms and a small number of new depositors will result in a negative balance;
• quite natural fears of citizens regarding the future of the hryvnia against the background of more tangible inflationary influence.

According to the expert, a mass "escape" of customers to currency deposits is unlikely. After all, for 1.5 years, a slow but relentless process of gradual reduction of foreign currency deposit rates has been going on. 
"From January 2023 to August 2024, the rates on deposits in dollars decreased by an average of 1-1.2 percentage points, and deposits in euros "shrunk" by an average of 0.5 percentage points. For comparison: inflation in the USA this year averages 3%. That is, buying a currency just to keep it in a stash means a slow loss of up to 3% of the value of savings on an annual basis. At the same time, due to low interest rates on currency deposits, the depositor indirectly loses up to 1.5% of the value of his own funds," he emphasized.
When making a decision to place funds on a bank deposit, the banker advises:

• Having "free" funds and a stable income, pay attention to longer-term deposits (from 1 year to 2.5 years), because it is precisely such deposits that can give the highest return — the maximum rates for deposits from 1 year are more than 13%.
• If there are doubts whether funds will be needed in the near future and in what amount, you can open two deposits at once: long-term and ultra-short (from 3 months) or choose a deposit program that allows early termination of the agreement with minimal losses of accrued interest.
• Against the background of relatively identical rates, banks offer a variety of bonuses, which distinguishes one or another deposit program from others. That is why the client can choose, for example, a deposit that "at the start" guarantees the depositor an additional 1% of income or the possibility of replenishing the deposit or early withdrawal with minimal interest losses.
• Ask about the size of the rate, including taxes (the actual rate will decrease to 3 percentage points) and bank commissions for opening and maintaining a deposit.

To get a more tangible profit, the optimal deposit size can be from 50 thousand UAH.   
“In the near future, hryvnia deposits will remain the most convenient, understandable and simple way to get passive income. Especially now, because, for example, in the banking application, opening a deposit takes a few minutes. And the amount of net income is many times higher than dollar or euro deposits. The main issues that may deter potential clients are the economic situation in the country (stability of the hryvnia, inflation rate, etc.), the course of the war and its consequences,” — summed up Dmytro Zamotayev. 

Reference:
JOINT-STOCK COMPANY "COMMERCIAL BANK "GLOBUS" (GLOBUS BANK) was founded in 2007. 
As of July 2024, the regional network has 31 branches. All branches of the bank are part of the unified Power Banking network, which allows working in conditions of no electricity.
GLOBUS BANK has a confirmed credit rating on the national scale at the uaAAA level, as well as a deposit rating at the ua2+ level on the scale of the Expert-Rating rating agency.
The bank's priority areas of activity are lending for energy-efficient projects, mortgage lending in the primary market, car lending, and lending to small and medium-sized businesses. 
GLOBUS BANK is an accredited partner of a number of state programs: the state mortgage program "eOselya", the program of preferential lending to small and medium-sized businesses "5-7-9", "Affordable Factoring", "Affordable Financial leasing 5-7-9”, “Energy independence of individuals - household owners”.
The Bank is a partner of the State Enterprise “Energy Efficiency Fund” under the programs of lending to condominiums and housing associations “Energodim” and “GreenDIM”.
On June 25, 2024, GLOBUS BANK became one of the 17 largest Ukrainian banks that signed the Memorandum on lending to energy infrastructure restoration projects.
The Chairman of the Board of GLOBUS BANK, Serhiy Mamedov, is the Deputy Chairman of the Board of Directors of the Confederation of Builders of Ukraine and Vice President of the Association of Ukrainian Banks.