Small banks are revising deposit rates, some of them have significantly reduced deposit yields. Let's consider what conditions are currently offered to private clients by banks with deposit portfolios of up to UAH 2 billion.
In May, inflation in Ukraine accelerated to 3.3% in annual terms, compared to 3.2% in April. It is expected that after the increase in electricity tariffs, inflation will increase even more in June, which will negatively affect the yield of deposits.
The return on deposits will also be affected by a possible increase in taxes, which is being discussed in government offices. Chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, Danylo Hetmantsev, noted that "personal income tax, military service, value added tax" may change.
According to preliminary data, the military levy may increase from 1.5% to 5%. This will directly affect the profitability of deposits, as individuals pay this tax together with personal income tax when receiving income from deposits. If now the total amount of taxes is 19.5%, then after the changes it may increase to 23%.
Ivan Mychlo, the head of the Lviv branch of RWS Bank, agrees that the increase in the military levy will affect the profitability of deposits, but he does not think that it will make deposits less popular.
"I do not think that the increase in military duty will significantly affect the profitability of deposits and their demand among the population. Since the military levy (1.5%) was first introduced, there has been no customer churn. Now it is planned to increase to 5%, but this is only a forecast. After a certain period of adaptation, demand can recover," explains Ivan Mychlo.
Ivan Svitek, the chairman of the board of Yunex Bank, also believes that an increase in the military levy is likely.
"Any increase in taxes complicates the situation, even for classic deposits. Market competition and economic conditions limit opportunities for deposit rate revisions. The increase in taxes will affect the real return for the depositor, as more of the accrued interest will be transferred to the budget," he notes.
According to him, the increase in taxes could encourage people to invest in government bonds or keep money at home or in checking accounts. The depth of this process will depend on the level of tax increases and the resource situation on the market. On the other hand, filling the budget, a large part of which goes to the defense of the country, may have priority.
We will remind, on June 18, the Ministry of Finance placed military bonds for 8.6 billion hryvnias and 204 million dollars.
