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. Last Updated: 07/27/2016

Retail Deposits Continue Upward Trend

MTA bank advertising 15.5 percent interest on deposit accounts Monday. Retail deposits grew 27 percent last year.

Retail deposits are set to continue growing — after a record jump in 2009 — and the share of foreign currency accounts will continue to fall as the economy recovers, the state Deposit Insurance Agency said Monday.

Retail deposits grew by 27 percent or 1.58 trillion rubles ($52 billion) last year — the biggest increase in recent years — the agency said, adding that "this points to a recovery of trust in the banking system and an increase in savings activity among the population."

Retail deposits were crucial for Russian banks as the global financial meltdown has effectively closed public debt markets from the second half of 2008 while Russians rushed to take their money out of banks and change rubles into dollars or euros as the national currency was devalued.

But the ruble exchange rate stabilized in early 2009, while the economy started to recover that summer from its first recession in a decade and — with most banks managing to survive the crisis — Russians gradually started to put their money back into bank accounts.

The agency estimated that this year, deposits could grow by 1.50 trillion rubles to 1.65 trillion rubles ($50 billion to $55 billion), while the share of foreign currency holdings could gradually fall to 23 percent to 25 percent by the start of 2011 from 28 percent as of Dec. 1, 2009.

Almost half of the 520 billion rubles that was put into banks in the final 1 1/2 months of the year — when people received year-end bonuses — was placed in current accounts or on demand deposits.

"In the [event] of falling interest rates on deposits, some of this money may in the near future move to the stock market or the real estate market," the agency said.

The data also showed that Russians remained wary of small banks, with the 30 largest ones accounting for 79.3 percent of all deposits. State-controlled Sberbank saw its share of deposits fall slightly to 49.4 percent from 51.8.