Deposits  

(H1 2007) 

In H1 2007, the deposit base of operating commercial banks continued increasing. In whole for the period, its volume increased by 20.1% and amounted to 20.2 Billion soms as of the late June (without regard to the OJSC Ayil Bank, the deposit base increased by 20.1%, up to 19.0 Billion soms). Deposits balance in national currency increased by 48.7% and amounted to 8.6 Billion soms (without regard to the OJSC Ayil Bank’s deposits, the increase amounted to 27.4%). At the same time, growth rates for deposits in foreign currency considerably decreased; their volume increased by 5.1%, up to 11.6 Billion soms year-to-date. As a result, the deposit base dollarization decreased by 8.2 pp in the reporting period and amounted to 57.5% as of the late June (without regard to the OJSC Ayil Bank’s deposits, dollarization level decreased by 4.5 pp, down to 61.2%).  

There was an increase in the share of personal deposits in the structure of deposit base, in depositors’ category. Their share in total volume of deposit base increased by 1.3 pp for the reporting period and amounted to 25.9% (without regard to the OJSC Ayil Bank the individuals’ share increased by 3.0 pp, up to 27.6%). 

The analysis of changes in the deposit base in the term category shows that the share of demand deposits decreased significantly during the first half of the current year and amounted to 67.7% as of the end of the period against 78.1% early in the year (without regard to the OJSC Ayil Bank the decrease was 6.0 pp). The share of short-term deposits increased from 17.1% to 21.2% due to an increase in the balance of deposits with maturity of 3 to 6 and 6 to 12 months. In addition, the succession of OJSC Ayil Bank to the banking system had a considerable effect on the long-term deposits; their share increased by 6.3 pp in the reporting period and amounted to 11.1% mostly due to an increase in the balance of deposits with 3 years maturity (without regard to the OJSC Ayil Bank the share of long-term deposits increased by 0.9 pp, up to 5.7%). As a result, the maturity of the deposit base increased by 3.3 months and amounted to 5.8 months as of the end of the reporting period. For time deposits this value increased by 6.6 months, up to 18.0 months (without regard to the OJSC Ayil Bank the increase in average maturity amounted to 1.0 month, and duration of time deposits increased by 0.6 months). Total concentration index of the deposit market decreased by 0.02 pp and amounted to 0.09, which is equivalent to the market presence of 11 banks with equal shares and indicates a low concentration.  

The volume of deposits attracted to the banking system in the period from January to June 2007 decreased by 18.2 % against the comparable period of the previous year and amounted to 32.4 Billion soms. Such a remarkable decrease in the total flow of deposits occurred due to a considerable decrease in personal demand deposits in foreign currency in one of the commercial banks. Without regard to the deposits of this bank, the volume of new deposits by 30.2% exceeded the volume of new deposits for the comparable period of 2006 and amounted to 28.8 Billion soms for the six months of 2007. The flow of deposits in national currency increased by 69.1% and amounted to 8.6 Billion soms, and the increment in foreign currency amounted to 18.7%, up to 20.3 Billion soms for the reporting period. 

Because of the remarkable decrease in the volume of new demand deposits their share in time structure of deposits flow decreased from 91.9% to 79.4% in the period from January to June 2006. The share of short-term deposits increased by 9.8 pp and amounted to 16.1%; the share of long-term deposits increased from 1.8% to 4.6%. As a result, the average maturity for new deposits increased from 1.0 month to 2.1 months in the reporting period, while the maturity of time deposits decreased from 11.8 months to 10.2 months due to the shift of the flow structure in the direction of increase in short-term deposits due to increase in 1-month and 1 to 3 months deposits. 

The interest rate for new deposits in national currency decreased by 0.1 pp compared to the period from January to June 2006 and amounted to 2.1% on average for the period. In the category of time deposits in national currency the average rate of deposits decreased by 1.6 pp, down to 6.8% in the reporting period due to increase in the volume of deposits of up to 1 month maturity. A general decrease was registered in the average rates of all deposits, except for those with 3 to 6 months maturity (Chart 5). 

The average rates for time deposits decreased in 12 banks against the comparable period of 2006, while in 6 banks the rates increased. 

A real rate for time deposits in national currency amounted to 3.4% on average for the period, which was by 1.2 pp higher than the rate for the comparable period of the previous year. Increase in the real value of these deposits was due to a decrease in the inflation rate (year-on-year). 

The rate for new deposits in foreign currency increased by 0.3 pp during H1 2007 and amounted to 0.7%. Such increase in the rate was due to a decrease in the flow of demand deposits in foreign currency (Chart 6). Weighted average rate for time deposits in foreign currency was subjected to considerable fluctuations during the reporting period; it decreased by 0.5 pp against the comparable period of 2006 and amounted to 4.6%. It was mostly caused by an increase in the volume of short-term deposits, and, to some extent, by a decrease in the interest rates of long-term deposits. 

The average rates for new time deposits in foreign currency decreased in 9 banks; the rates increased in 10 banks.