CB chair warns that banks with high rates face serious risks
MOSCOW. Sept 30 (Interfax) - Banks with high deposit rates face serious risks, CB Chairman Sergei Ignatyev told reporters.
"We monitor bank deposit rates closely and have achieved certain results in this respect," he said, adding that some banks were paying as much as 16%-17% or even higher as of September 1, according to CB data.
But banks offering high deposit rates were taking major risks because lending rates will come down before long, Ignatyev said.
"If inflation comes down fast, then lending rates will clearly come down just as fast," he said.
Lending rates could be less than 10% in a year or two and not 15%-16%, he said.
Banks offering deposit rates of 16% today will have that to pay to account holders in two or three years, Ignatyev said. "It is highly likely that their interest margin will be lower than the interest they pay out. This poses risks for the banks and their creditors and account holders. It is highly likely that lending rates will fall fast," Ignatyev said.
Inflation hit its low of 8% in annual terms in May 2007. "Deposit rates for up to a year were also at a low then of 9.2% by our estimates," he said.