Tuesday, March 22 2011 14:08
Bank experts expect increase in interests on deposit in AMD to 11%-14% and 1%-1.5% fall of interests on foreign exchange deposits
ArmInfo. In 2011 average interests on deposits in AMD will be comparable to the yield of the three-year government bonds i.e. within 11%-14%, whereas the interests on foreign exchange deposits will fall 1%-1.5% over the year. Ameriabank Chairman of Director-Director General Artak Hanesyan told ArmInfo that the market is not volatile at present. But the latest incidents in Japan may make certain adjustments to it.
"Interests on deposits in terms of AMD keep growing because of the growth of the refinancing rate (from 7.75% to 8.25% since March 4) and the inflation pressure on the market that leads to the growth of the yield of government bonds, which creates the upward trends of interests on dram deposits and dram credits. As regards foreign exchange deposits, bankers have different views. Thus, some of them think that Libor may start growing already in late 2011, while others say that the current level of interest rates will not change for at least a year," Hanesyan said.
He believes that in case of 5% difference of interest rates in favor of the deposits in AMD, funds from the deposits in terms of USD will flow to the deposits in AMD and customers will face no risks. In this light, convertible and multi-currency deposits are very convenient for customers, but risky for banks in case of discrepancies in exchange. Ameriabank has already begun making certain steps towards reduction of interests on deposits. The first step was reduction of deposits in foreign exchange in average by 0.5%-1% starting March 9.
Given the high liquidity in the banking sector of Armenia, loan interest rates fell 2%-3% in 2010 in average. As regards loans in the Armenian dram, Hanesyan said that the interests of corporate and retail loans may grow in 2011.
Interests on loans in AMD will grow proportionally to the growth of interest in deposits in AMD - 2% in average. The approach to loans in USD is two-way: on the one hand, the following changes in the regulatory framework of compulsory reservation (in case of a growth) will lead to surplus free funds in USD in the banking system, which allows investing more in USD. On the other hand, considering the growing cost value of dollar funds, no significant fall of interests is expected i.e. the interests on loans in USD will be left unchanged. Ameriabank is currently revising its policy of interest rates towards raised and placed funds.
By late 2010 the interests on deposits in AMD grew to 10%-12% in the banking system of Armenia and interests of deposits in USD made up 7%-9%.
To recall, TDA Holdings Limited, the affiliated company of the largest investment company in Russia Troika Dialog, is the owner of AMERIABANK with 99.99%.
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