The FINANCIAL — The majority of depositors in the South Caucasus prefer to keep their banking deposits in USD and EUR, while their neighbours (82% of depositors in Russia and 65% in Turkey) save money in their respective national currencies.
Turkey’s population is around 75 million and the aggregate number of deposit holders (real persons) as of July 2013 is 51 million.
“Turkish citizens prefer to hold their savings largely in the local currency, TL. As of September 2013, nearly 65% of total deposits are in the local currency whereas 18% and 15% of the total are held in USD and EUR, respectively,” Yucel Yazar, Head of the Protocol Division at the Central Bank of the Republic of Turkey, told The FINANCIAL.
“For households, real interest rates and the exchange rate expectations are the main factors that are considered to affect the currency preference for the saving deposits. For corporates, on the other hand, the share of exports in total revenues and cost structures by currencies are also considered to be important factors in their investment decisions,” Yazar said.
“Russians keep 70% of their savings as bank deposits. The preferred currency for Russian depositors is the national currency; 82% of depositors save money in RUB. Deposit rates and market situation are the main factors determining Russians’ choice to save money in the national currency,” said Ashot Simonyan, head of deposits and commission services at VTB24.
Total deposit volume amounted to 77,712.3 million Manat as of the end of July 2013 in Azerbaijan. Out of them demand and time deposits in the national currency amounted to 38,710.4 million Manat and 39,001.9 million Manat in foreign currency.
According to the Central Bank of Azerbaijan (CBA), during the same period of 2012, the volume of deposits in national and foreign currencies amounted to 67,712.2 million Manat. Term and time deposits in Manat amounted to 12,326.1 million. The total in foreign currency amounted to 25,059.0 million Manat.
As of the end of July 2013, the amount of resident deposits in commercial banks in Armenia has increased to 192.0 billion Drams (22.8%), compared to the same period last year, exceeding the bar by up to 1.0 trillion Drams.
Savings in foreign currency increased by 12.1% in comparison to savings in the national currency. This has led to some improvement in the relationship between deposits in AMD or in foreign currency. A year ago, the ratio was 2.38 in favour of foreign currency savings, yet now it is down to 2.17.
The amount of deposits in foreign and national currency increased by 35.5 billion Drams during the year. It reached 265.3 billion Drams at the end of July 2013. In annual terms, deposits in the national currency increased by 60.5 billion Drams, and in foreign currency – by 96.0 billion Drams.
Foreign currency still dominates among Georgian depositors. Deposits in foreign currency amounted to GEL 5,677,166 thousand as of 1 September, 2013. Out of that demand deposits amounted to GEL 2,337,412 thousand and time deposits – GEL 3,339,754 thousand. The volume was GEL 5,269,633 thousand as of 1 September, 2012.
Deposits in national currency amounted to 3,713,008 thousand as of 1 September, 2013, and GEL 3,081,083 as of 1 September, 2012.
All five neighbouring countries offer almost equal interest rates on deposits, amounting to over 9%.
The highest deposit rates are offered by commercial banks operating in Armenia for the national currency.
The annual interest on time deposits for a year is more than 10%, while for USD it fluctuates in the range of 7-8%, and for EUR even less. In July the Armenian Dram weakened towards USD by 0.5%. With 8.82% offered by the top ten Russian banks, Georgia’s northern neighbour holds the leading position. Azerbaijani depositors get on average 8.7%, Georgians – 8.5%, Turks – 8.08% and Armenians – 8%.
Russia, which was ranked among the top countries in terms of the largest number of banks, behind the USA and Germany, currently counts 885 commercial banks as of 1 August, 2013. Armenia, with its population of 3.3 million has more banks than Georgia, with its 4.5 million people.
There are 19 commercial banks operating in Georgia. As of the end of 2012, there were 21 commercial banks in Armenia, according to armbanks.am. According to the Central Bank of Azerbaijan, 43 banks have a license to operate in Azerbaijan.
“A total of 49 banks are operating in the Turkish banking sector as of October 2013. Out of them, 13 are investment banks (4 state-owned, 6 local private, 3 foreign-owned), 4 are participation banks (all private), 24 are commercial banks (3 state-owned, 11 local private, 10 foreign-owned) and 6 are foreign banks operating through offices instead of separate banks,” said Yazar, Central Bank of the Republic of Turkey.
In his words, the total number of banks will increase to 50 as the new entrant, Bank of Tokyo Mitsubishi, become operational.
In Turkey, the total volume of deposits is 875 billion Turkish Lira which equals USD 430 billion as of September 2013. Out of them, 38.3 billion is the amount of interbank deposits.
As for Russia, the total volume of deposits amounts to RUB 1,171.6 billion.
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