Determinants of the savings market in Russia

  • Received August 22, 2017;
    Accepted April 16, 2018;
    Published May 2, 2018
  • Author(s)
    Nina Morozko
    ORCID ,
    Natalia Morozko
    ORCID ,
    Valentina Didenko
    ORCID
  • DOI
    http://dx.doi.org/10.21511/bbs.13(1).2018.18
  • Article Info
    Volume 13 2018, Issue #1, pp. 196-208
  • TO CITE АНОТАЦІЯ
  • Cited by
    6 articles
  • 1573 Views
  • 392 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

The main component of the bank’s efficient operations is a sufficient amount of deposit resources. The sharp devaluation of the national currency, the unstable situation of banks, and a significant number of bankruptcies adversely affected the propensity of the subjects to save. In the banking sector, a critical situation has developed when depositors, having lost confidence in banking institutions, began to withdraw money from deposit accounts, and in the crisis, this issue becomes the most important, because the massive withdrawal of deposits significantly worsens the liquidity of banks. With that in mind, the purpose of the article is to consider the main trends and prospects for the savings market development in Russia.
The article analyzes the strengths and weaknesses of Russia’s savings market. Using banking statistics, similarities and differences in the savings market are shown, based on determinants such as the share of deposits in bank liabilities; the volume of deposits in national and foreign currencies, the role of leading banks; number of accounts; the volume of guaranteed deposits; and banking conditions. The study focuses on an empirical analysis of the relationship between gross savings and banking variables such as demand deposits, interest spread, and the bank capital to assets ratio. The domestic market of household savings is analyzed. This conclusion is also made visible as a result of the correlation-regression experiment.

view full abstract hide full abstract
    • Table 1. The share of retail deposits in the liabilities of leading banks as of January 1, 2016
    • Table 2. The amount of funds on retail deposits in rubles and in foreign currency in leading banks as of January 1, 2016, RUB mln
    • Table 3. Leading banks with a federal network of branches and subsidiaries as of January 1, 2016
    • Table 4. Dynamics of the number of accounts and the average amount of household deposits
    • Table 5. Comparison of the basic conditions for term retail deposits of leading banks for the amount of 250 thousand rub. as of September 10, 2016, % per annum
    • Table 6. The household term deposits conditions of leading banks for deposit of 250,000 rub. as of September 10, 2016, %
    • Table 7. Discount terms at the mortgage lending rate by credit institutions depending on the bank deposit as of September 10, 2016
    • Table 8. Interest rates on VTB24 savings account
    • Table 9. Correlation
    • Table 10. Correlation matrix
    • Table 11. The regression analysis summary
    • Adeyeye, P. O., Azeez, B. A., & Aluko, O. A. (2016). Determinants of small and medium scale enterprises financing by the banking sector in Nigeria: a macroeconomic perspective. Investment Management and Financial Innovations, 13(1-1).
    • Agarwal, S., & Hauswald, R. (2010). Distance and Private Information in Lending. Review of Financial Studies, 23(7), 1-32.
    • Ando, A., & Modigliani, F. (1963). The “Life Cycle” Hypothesis of Saving: Aggregate Implications and Tests. The American Economic Review, 53(1), 55-84.
    • Basten, C., Fagereng, A., & Telle, K. (2016). Saving and Portfolio Allocation Before and After Job Loss. Journal of Money, Credit and Banking, 2, 293-324.
    • Berezina, S. (2017). Perspectives of accumulation of funds in the accumulative pension insurance system of Ukraine. Investment Management and Financial Innovations, 14(2), 128-138.
    • Browning, M., & Lusardi, A. (1996). Household saving: Micro theories and micro facts. Journal of Economic Literature, 34(4), 1797-1855.
    • Canova, L., Rattazzi, A. M., & Webley, P. (2005). The hierarchical structure of saving motives. Journal of Economic Psychology, 26(1), 21-34.
    • Carroll, C., & Summers, L. H. (1987). Why Have Private Savings Rates in the United States and Canada Diverged? Journal of Monetary Economics, 20(2), 249-279.
    • Carroll, C., Overland, J., & Weil, D. N. (2000). Saving and Growth with Habit Formation. American Economic Review, 90(3), 341-355.
    • Central Bank of the Russian Federation (2018).
    • Degryse, H., & Ongena, S. (2005). Distance, Lending Relationships, and Competition. Journal of Finance, 60(1), 231-266.
    • Ewing, B. T., & Payne, J. E. (1998). The long-run relation between the personal savings rate and consumer sentiment. Journal of Financial Counseling and Planning, 9(1), 89-96.
    • Fisher, I. (1930). The Theory of Interest, as determined by Impatience to Spend Income and Opportunity to Invest it. New York: Macmillan.
    • Fisher, P. J., & Anong, S. T. (2012). Relationship of saving motives to saving habits. Journal of Financial Counseling and Planning, 23(1), 63-79.
    • Friedman, M. (1948). Utility Analysis of Choices Involving Risk with Leonard Savage. Journal of Political Economy, 4(56), 38-47.
    • Gurley, J. G., & Shaw, E. S. (1960). Money in a theory of finance (371 p.). Washington, DC: Brookings Institution.
    • Hao Manh Quach (2016). Does access to finance improve household welfare?Investment Management and Financial Innovations, 13(2), 76-86.
    • Hayashi, F., Ito, T., & Slemrod, J. (1988). Housing finance imperfections, taxation, and private saving: A comparative simulation analysis of the United States and Japan. Journal of the Japanese and International Economics, 2(3), 215-238.
    • Juster, F. T., Wachtel, P., Hymans, S., & Duesenberry, J. (1972). Inflation and the Consumer. Brookings Papers on Economic Activity, 1, 71-121.
    • Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. London: Macmillan.
    • Leland, H. (1968). Saving and uncertainty: The precautionary demand for saving. Quarterly Journal of Economics, 82(3), 465-473.
    • Melnikova, Ye. I. (‎2007). Экономическая природа сбережений и инвестиций домашних хозяйств [Ekonomicheskaya priroda sberezheniy i investitsiy domashnikh khosiaystv]. Izvestiya UrGEU, 2(19), 75-81.
    • Ryzhakovskaya, L. Yu. (2009). Население и рынок финансовых услуг: линии защиты сбережений [Naseleniye i rynok finansovykh uslug: linii zashchity sberezheniy]. Finansy i Kredit, 10, 64-72.
    • Say, J.-B. (2000). Трактат по политической экономии [Traktat po politicheskoy ekonomii]. In F. Bastiat, Экономические софизмы; Экономические гармонии [Ekonomicheskiye sofizmy; Ekonomicheskiye garmonii]. Moscow: Delo: Akad. nar. khoz-va under the government of the Russian Federation.
    • Senior, N. W. (1836). An outline of the science of political economy. London: W. Clowes and Sons, Stamford Street.
    • Smith, A. (1962). Исследование о природе и причинах богатства народов. Вступит. статья и комментарий В. С. Афанасьева [Issledovaniye o prirode i prichinakh bogatstva narodov. Vstupit. Statia i kommentariy V. S. Afanasieva] (684 p.). Мoscow: Izdatelstvo sotsialno-ekonomicheskoy literatury.
    • Van Veldhoven, G. M., & Groenland, E. A. (1993). Exploring saving behaviour: A framework and a research agenda. Journal of Economic Psychology, 14(3), 507-522.
    • Wärneryd, K. (1989). On the psychology of saving: An essay on economic behavior. Journal of Economic Psychology, 10(4), 515-541.
    • Wärneryd, K. (1999). The psychology of saving. A study of economic psychology. Cheltenham: Edward Elgar Publishing.
    • Xiao, J. J., & Noring, F. E. (1994). Perceived saving motives and hierarchical financial needs. Journal of Financial Counseling and Planning, 5, 25-44.
    • Xiaoqing Hu (2004). Households' Savings and Portfolios. Investment Management and Financial Innovations, 1(3), 132-144.
    • Yuh, Y., & Hanna, S. D. (2010). Which households think they save? The Journal of Consumer Affairs, 44(1), 70-97.
    • Yunoshko, O. Yu., & Kumukova, I. D. (2013). Политика коммерческих банков Российской Федерации в области привлечения средств: анализ вкладов физических лиц [Politika kommercheskikh bankov Rosiiyskoy Federatsii v oblasti privlecheniya sredstv: analiz vkladov fizicheskikh lits]. Izvestiya IGEA, 3(89), 19-24.
Related Articles

  • Evaluating the nationalization & privatization effect: a case of Indian banking industry

    Manju Rajan BabuORCID , Ashok Kumar M.ORCID doi: http://dx.doi.org/10.21511/bbs.13(1).2018.02
    Banks and Bank Systems Volume 13, 2018         Issue #1         pp. 11-21 Views: 2868 Downloads: 403 TO CITE АНОТАЦІЯ

    The facilitation of economic transactions and friendly investor environment is undertaken through effective performance of financial systems. Mobilization of savings and funding the profitable business opportunities are essential in improving the efficiency of intermediation. The study aims to evaluate the effects of nationalization and privatization on Indian banks. Various factors have been considered to examine the effects of privatization and nationalization, including sources of public sector inefficiency, measures of firm performance, econometric issues, and the mode of privatization. The data was collected for the period of 1998 to 2016 from Indian banks. Data Envelopment Analysis (DEA) was used to evaluate the financial reports of the banks selected to evaluate the efficiency of input and output variables. Positive results were observed, concerning the efficiency and profitability of banking industry after banks’ privatization. Performance of private banks has been observed effective and efficient as compared to the public sector banks. Privatization of banks must be increased and maintained to sustain the efficiency of the banks and implement strategies to maintain the assets. Future studies may recruit more appropriate sample size to evaluate the privatization and nationalization effects of Indian banking industry. Greater number of banks will provide more precise results, using data envelopment analysis.

  • ERP implementation in banks: success factors & impact on financial performance

    Munther Al-Nimer , Ahmed Omush , Adel Almasarwah doi: http://dx.doi.org/10.21511/bbs.12(4).2017.02
    Banks and Bank Systems Volume 12, 2017         Issue #4         pp. 17-30 Views: 2716 Downloads: 1146 TO CITE АНОТАЦІЯ

    The study aims to measure the extent of implementing ERP systems in the banking sector in Jordan, and identify the main factors that influence the implementation decision, in addition to measure the impact of the post-implementation of the ERP system on the financial performance. The study utilized a content analysis as a research instrument. The study of population consisted of all the banks in Jordan, where the study applied ‘Purposive Sample’ type. Therefore, the study included 11 banks from 2011 to 2016.
    The study indicated that the implementation year of the ERP system started in most of the Jordanian banks in 2013, and the rates vary from bank to bank according to their importance and the level of awareness. Training courses are considered the main variable that these banks face in the process of implementation. In addition, awareness of the advantages, the cost, and supporting the infrastructure are the core factors needed to influence the implementation decision.
    There is no impact when implementing an ERP system on the financial performance of the Jordanian banks in regard to the ROI and the DPS; on the other hand, there is an impact of the ERP system on the overall performance of the banks.
    The study recommends to disseminate knowledge on the advantages of implementing of ERP system in Jordanian banks and to develop the IT department efficiency. Moreover, it will be worthwhile to examine the effect of ERP systems by utilizing financial and non-financial measurements.

  • Internal audit and financial performance of Yemeni commercial banks: Empirical evidence

    Saddam A. HazaeaORCID , Mosab I. TabashORCID , Jinyu Zhu , Saleh F. A. KhatibORCID , Najib H. S. FarhanORCID doi: http://dx.doi.org/10.21511/bbs.16(2).2021.13
    Banks and Bank Systems Volume 16, 2021          Issue #2         pp. 137-147 Views: 2001 Downloads: 731 TO CITE АНОТАЦІЯ

    This study seeks to verify the contribution of internal audit (IA), especially its role in improving financial performance in Yemeni commercial banks, with a specific focus on three factors, namely: the independence and objectives of IA, the quality of IA and the size of IA. This study reviews some existing literature on the contribution and role of IA in improving financial performance. It relies on available data from questionnaires. 90 questionnaires were distributed to nine commercial banks in Yemen (23 branches) working under the supervision of the Central Bank of Yemen; 81 questionnaires (90%) were regained and used in the process of analysis. To analyze the data, three analysis approaches were used, including description, correlation, and regression. The results showed that the IA has a significant impact on the overall performance of Yemeni commercial banks. Furthermore, the results showed that the auditors’ efficiencies, as well as their financial and accounting experiences, have a significant and positive impact on financial performance. It was revealed that the independence and objectivity of internal auditors are highly insignificant for financial performance. However, the size of IA and the frequency of the auditors’ meetings have a negative and significant effect on financial performance. This study provides some recommendations for improving the effectiveness of IA, which in turn will contribute to improving financial performance.

Download Preview
Close
Banks and Bank Systems
Banks and Bank Systems