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. Last Updated: 07/27/2016

Private Bank Accounts Up 8.6%, Ministry Says

The percentage of private deposits held by top savings bank Sberbank shrank in the first quarter for the first time since 1998, but the sector as a whole is booming, according to new government data.

Statistics published by the Economic Development and Trade Ministry show that the number of private accounts in the first three months of the year increased 8.6 percent and added 0.5 percent to the cash held by banks.

Analysts say that bank deposits are the sole means for the average person to guard against inflation.

Sberbank's share of the private deposit market fell from 76.5 percent Jan. 1 to 75.4 percent April 1. At the start of 1999, 71.7 percent of all private deposits were held by Sberbank, a number that grew to 73.5 percent in January 2000.

"The distinguishing trend on the private individuals' accounts market for 2001 is that of a gradual reorientation toward investments in long-term deposits, which may be evidence of increased trust in a broader range of banks," the ministry wrote in its report.

Andersen consulting estimates that the Russian population holds about $26 billion in banks — about 5 percent to 6 percent of the country's GDP. In Western countries this figure is about 16 percent to 18 percent. Andersen also estimates that a further $40 billion is kept "under the mattress" in Russia.

"There is still room for the number of accounts to grow — this is only the beginning," said NIKoil analyst Alexei Kazakov. "Increasing deposits will clear the sector of ailing banks," he said.

Kazakov said the growth in deposits is also connected with a rise in the population's real income, which grew 27 percent in the first quarter, according to the State Statistics Committee.

Factoring in inflation means that the growth in private ruble deposits is only 1.5 percent for the quarter, said Troika Dialog analyst Andrei Ivanov, adding that "the tendency is there nonetheless."

In real terms, individual deposits in Sberbank increased 50 percent to 373 billion rubles in the first quarter.