ANALYSIS OF DEPOSIT OPERATIONS OF COMMERCIAL BANKS

Nikitina Anastasia Vyacheslavovna

student of the Faculty of Economics of the Federal State Budgetary Educational Institution of Higher Professional Education Orel State Agrarian University, Russian Federation, Orel

E- mail: Nastena _93-09@ mail . ru

Tsvirko Alexander Alexandrovich

scientific supervisor, Ph.D. economy Sciences, Associate Professor Orel State Agrarian University, Russian Federation, Orel

Deposit relationships are formed in the deposit market as a result of the actions of depository institutions and the circulation of deposit instruments. The basis of deposit instruments is the deposit.

According to Lavrushin O.I. “Deposits mean all time and fixed-term deposits of bank clients, except savings deposits.”

The organization of deposit operations is carried out in compliance with the following principles (Figure 1).

Picture 1. Principles of deposit operations

The work of Russian credit institutions is one of the main conditions for the development of the country's economy. Of particular importance for achieving long-term goals and sustainable development of credit institutions are deposit operations, as a result of which the most stable part of the resource base is formed. The stability of deposit sources of funds is determined by knowledge of the period of attraction and the constancy of the bank’s relationship with depositors (the renewable nature of these relationships). With a significant portion of stable sources of funds, banks have the opportunity to increase the volume of medium- and long-term operations in the field of lending to the real sector of the economy and meet the needs of the economy for investment resources.

In this regard, it seems relevant to carry out an analysis of deposits and other funds attracted by credit institutions of the Russian Federation over the past three years in order to identify their structural features and potential uses in the field of lending. Let's consider the structure of liabilities of credit institutions of the Russian Federation (Table 1).

Table 1.

Structure of liabilities of credit institutions, grouped by sources of funds (as of January 1, 2011-2013)

	2011		2012		2013
	Billion rub.		Billion rub.		Billion rub.
Funds and profits of credit institutions
Loans, deposits and other borrowed funds received by credit institutions of the Bank of Russia
Accounts of credit institutions, total
Total customer funds
Including: Budget funds on a payslip
Funds from state and other extra-budgetary funds on the payslip
Funds of organizations in the current account and other accounts
Client funds in settlements
Deposits of individuals
Client funds for factoring and forfeiting transactions
Bonds
Bills of exchange and bank account packages
Derivatives
Other liabilities, total
Total liabilities

The structure of liabilities during the analyzed period did not undergo significant changes: the main share falls on customer funds, which decreased from 62.4% (as of January 1, 2011) to 60.8% (as of January 1, 2013), as well as funds and profit of credit institutions, the share of which decreased from 12.8% to 11.9% on similar dates. The greatest growth is demonstrated by loans, deposits and other attracted funds received by credit institutions from the Bank of Russia. This situation indicates that credit institutions have been actively using loans from the Central Bank of the Russian Federation within the refinancing system over the past three years, experiencing the need for liquid funds.

The main sources of formation of resources of credit institutions of the Russian Federation are customer funds, in the structure of which there are deposits of individuals, whose share remained practically unchanged, deposits legal entities and funds of organizations in settlement and other accounts. Funds of legal entities in bank and deposit accounts together constitute a third of all bank liabilities, about a third are deposits of individuals.

The structure of deposits attracted by credit institutions (as of January 1, 2011-2013) is presented in Table 2.

Table 2.

Structure of deposits (deposits) attracted by credit institutions (as of January 1, 2011-2013)

Deposits and other funds raised	2011		2012		2013
	Billion rub.		Billion rub.		Billion rub.
Deposits and other funds raised from legal entities (except credit institutions)
Deposits of individuals
Loans, deposits and other borrowed funds received from other credit institutions
Total deposits

Analyzing the data in Table 2, it should be noted that in the structure of deposits the main share falls on deposits of individuals. During the analyzed period, an ambiguous trend is observed: first, the share decreases from 50.0% to 47.9%, which is associated with higher growth rates of deposits of legal entities, then increases to 49.8% as of January 1, 2013, which is associated with a slowdown in the growth rate of deposits of legal entities and credit institutions. Deposits of legal entities had a growing trend, so as of January 1, 2011, their share was 30.8%, and as of January 1, 2013 - 33.6%.

It should be said that funds are attracted from credit institutions mostly in the form of loans. Since the official statistics published by the Bank of Russia do not show deposits of credit institutions separately, therefore, Table 2 on line 3 shows all types of funds attracted by credit institutions from other credit institutions: deposits, loans and other funds.

Table 3.

Structure of deposits of organizations (except credit institutions) by terms and currency of attraction (as of January 1, 2011-2013)

	2011		2012		2013
	Billion rub.		Billion rubles		Billion rub.
Deposits and other organizational funds of legal entities (except credit institutions), total
in foreign currency
including: On demand and up to 30 days
in foreign currency
Valid from 31 days to a year
in foreign currency
More than a year
In foreign currency

It is typical for legal entities to open deposits both in rubles and in foreign currency, with the former predominant. Thus, the share of deposits in rubles, in general, tends to increase: as of January 1, 2011 - 58.7%, as of January 1, 2012 - 65.6%, as of January 1, 2013 - 63.3% .

But still, the interest of legal entities in deposits in foreign currency remains very high at the level of 35-40%.

In conclusion, it should be noted that legal entities place their temporarily free cash on deposit accounts in a commercial bank to receive additional income. However, they do not have the right to transfer funds that are in deposits to other persons.

Bibliography:

1. Babichev M.Yu. Banking, in free access mode: [Electronic resource] - Access mode. - URL: http://www.bibliotekar.ru/bank-6/, accessed November 20, 2013.

2. Zhukova E.F. Banks and banking operations M.: Unity 2010 - 632 p.

3. Lavrushin O.I. Banking M.: Finance and Statistics, 2012 - p. 768.

4.Latus E.B. Banking services market. Legal support for stability // Banking. - 2011. - No. 10 - p. 449.

5.Materials of the Bank of Russia, in free access mode: [Electronic resource] - Access mode. - URL: http://www.cbr.ru accessed November 20, 2013

Analysis of the efficiency of deposit operations of a commercial bank

Analysis of the effectiveness of deposits takes place in four stages.

At the first stage, it is necessary to consider the composition, structure and dynamics of funds in the balance of deposits, as well as their crediting and withdrawal.

There are two types of analysis - horizontal and vertical, they can be carried out according to the following criteria:

1. by the term of the deposit;
2. by type of deposit currency;
3. by type of depositor;
4. according to the deposit form.

The second stage involves assessing the cash flow in the deposit. The purpose of the analysis is to substantiate management decisions that are aimed at increasing the efficiency of using clients' deposit funds.

The third stage of the analysis is necessary to study the influence of factors on the dynamics of changes in the amount of interest expenses on deposit transactions. This is necessary because the attraction of funds to the deposit is carried out in conjunction with the payment of interest to the depositor.

To make such calculations, the formula is used:

$P = (O · St) / 100$, where:

• P - interest expenses, million rubles;
• O – average balance of funds in deposits, million rubles;
• St – deposit interest rate, interest.

The efficiency of using deposit funds is assessed at the fourth stage.

Note 1

The goal of the deposit policy is to attract as much money as possible into deposits for their further issuance in the form of loans. Therefore, to evaluate efficiency, it is necessary to compare the indicators of funds invested in the bank (deposits) with the indicators of funds issued by the bank (loans).

The formula for calculating the efficiency of using deposit funds is as follows:

$Kef = VC / KR$, where:

• VC - total amount of deposits, million rubles;
• KR – total amount of loans issued, million rubles.

This indicator characterizes the entire amount of deposits per ruble of funds in the form of a loan.

Note 2

The main goal of analyzing the deposit operations of a commercial bank is to substantiate strategic and tactical management decisions, the task of which is to increase the level of efficiency in the use of funds in deposits.

Evaluation of deposit transactions

An assessment of deposit policy and deposit operations allows a commercial bank to:

1. Establish monitoring of the implementation of goals, objectives, as well as the basic principles of the deposit policy of a commercial bank;
2. Assess the need to use a variety of ways to attract funds into deposits;
3. Carry out a check based on an analysis of the deposit portfolio, as well as evaluate the deposit portfolio for the presence of an expanded line of products, and subsequently assess the level of stability and efficiency of the portfolio;
4. Assess the bank’s need to attract deposits and establish their volume;
5. Rate level effective use deposit resources;
6. Assess the need to maintain the existing or form a new deposit policy.

As with the analysis of deposit policy, the assessment of deposit policy is also carried out in stages. Let's consider the main stages of assessing deposit operations:

The first stage is an assessment of methods for organizing deposit policy. At this stage it is necessary to identify the presence of:

1. deposit policy document;
2. internal bank regulations on customer deposits;
3. specialized units focused on participation in the analysis of deposit policy;
4. an information database that allows you to evaluate the effectiveness of depository activities;
5. the results of this stage are in documentary form, reflecting the main shortcomings of deposit activities and methods for eliminating them.

The second stage is the analysis of the deposit portfolio. The purpose of this stage is to collect and summarize data relating to the bank’s depository activities, determine compliance with declared and implemented plans, etc.

This analysis covers the following areas of the bank’s activities:

1. Resource base;
2. Funds in bank liabilities;
3. Analysis of clients by their segments;
4. Deposit portfolio stability analysis,
5. And so on.

The third stage is assessing the sufficient level of attracted resources. Here we evaluate how sufficient the level of funds raised is. The assessment involves monitoring the implementation of the plan regarding the indicators of attracted resources.

The fourth stage is assessing the effectiveness of the bank’s use of deposit funds. Efficiency assessment is carried out based on the requirements that deposit resources must have:

1. dependence of factors that influence the profitability of the bank;
2. interdependence of deposit funds and areas of active operations of the bank;
3. the need to use most of the deposit resources in active operations that generate income.

The fifth stage is adjusting the deposit policy. At this stage, a commercial bank needs to decide whether to keep the existing deposit policy, adjust it, or completely replace it with a new one.

Note 3

The deposit policy assessment process allows the bank to assess the consistency of plans with the actual results of its depository activities.

ANALYSIS AND EVALUATION OF DEPOSIT OPERATIONS

Characteristics of Sberbank’s activities in raising funds

An assessment of a bank's solvency is usually preceded by a consistent study of the state of assets and liabilities for homogeneous groups, identifying their qualitative characteristics that affect the profit and level of capitalization of the bank. Analysis of the quality of assets and liabilities is a preparatory stage for assessing the bank’s activities, ensuring the development of measures to overcome crisis situations and stability in work.

The analysis methodology involves determining the main qualitative characteristics of assets and liabilities. The concept of “asset quality” combines such criteria as the degree of liquidity, profitability, diversification of assets and the degree of investment risk.

Bank assets according to the degree of liquidity, in turn, are divided into first-class assets, liquid assets, slow-moving assets and illiquid assets. Based on profitability, assets are divided into assets that generate income and assets that do not generate income.

Commercial banks operating in a crisis are required to study the composition and structure of liquid funds according to the degree of diversification of assets, grouping them by type of counterparties, by the terms of invested funds, by economic sectors, etc. In the process of such work, the bank can identify first-class standard assets that generate consistently high income, and at the same time get rid of existing problem and doubtful assets.

The obligations of commercial banks, as is known, arise as resources are attracted. The quality of liabilities is assessed based on four criteria: stability, urgency, payment and diversification of attracted and borrowed funds. However, solving many practical problems requires assessing the quality of obligations according to the type of volatile, urgent and some other characteristics that determine the possibility of using raised funds for lending to sectors of the economy.

The current structure of obligations of credit institutions in many regions does not meet the requirements of the standards adopted by the banking community. In the total volume of funds raised, firstly, the share of demand deposits is quite high, i.e. so-called volatile obligations. Secondly, in my own way specific gravity the funds raised are short-term in nature, which undoubtedly slows down the process of investing in the economy.

At the same time, positive trends are noticeable: the stability of the banking system is increasing, the share of funds raised on demand principles is decreasing, and deposits with maturities of up to three years and above are increasing. In addition, the participation of individuals in the formation of the resource base of commercial banks is increasing. If in 2008-2009 g. the share of deposits of legal entities in commercial banks accounted for 4%, in Sberbank - 0.5%, then two years later these figures increased 7-8 times.

However, despite the observed dynamic processes of stabilization of criteria for assessing the quality of obligations, they have not yet become the basis for expanding active operations and ensuring a way out of the crisis. A necessary condition The solution to this problem should be the further expansion of the resource base of all credit institutions and its diversification through demand deposits and time deposits: time deposits will ensure the liquidity of the balance sheet, and demand accounts will ensure the solvency of the bank.

The combination of factors under the influence of which the solvency and liquidity of a bank are formed indicates the paramount importance of maintaining certain, objectively necessary relationships between three components: equity capital, attracted and allocated funds through the operational management of their structural elements.

Thus, analysis of the bank’s active and passive operations, assessment of the compliance of attracted and placed funds in terms of terms and volumes, as well as capital adequacy are necessary areas for assessing the bank’s solvency.

Funds raised by the bank from its clientele are credited to current, deposit and savings accounts. The balances in such accounts are summed up and given as a single indicator in the balance sheet. During the analysis, deposit funds raised are grouped by maturity in order to know for what period a particular amount of funds is raised. Increasing the share of demand deposits reduces the bank's interest costs and allows for higher interest profits. However, it should be borne in mind that these deposits are the most unpredictable financial instrument, so their high share in the resource base can weaken the bank's liquidity. Time deposits are considered the most stable part of attracted resources. Increasing the share of time deposits in the resource base helps to increase the bank's stability and allows for effective management of the bank's liquidity and solvency.

When attracting funds for deposit from a client, a deposit agreement is concluded with him. Banks independently develop a form of deposit agreement, which is standard for each individual type of deposit. The agreement is drawn up in two copies: one is kept by the depositor, the other by the bank in the deposit department. The agreement stipulates the amount of the deposit, its validity period, the interest that the depositor will receive after the expiration of the agreement, the obligations and rights of the depositor, the obligations and rights of the bank, the responsibility of the parties for compliance with the terms of the agreement, and the procedure for resolving disputes.

To process deposit transactions, the following are used: personal account, savings book, control sheet, settlement and check books, alphabetical card, transaction diary, receipts, cash receipt orders, depositor's order to write off the amount, notification to subsequent control, application for transfer of deposit, register for recording applications, a book for registering lost passbooks.

Deposits can be made in cash only from individuals. From legal entities, contributions to deposit accounts are accepted only by non-cash means.

When closing a deposit, the client must submit to the bank a deposit agreement and a deposit book that must be repaid. The bank offers the client to issue a cash order for the amount of the deposit and interest on it.

The main tasks for managing deposit operations of the bank are:

• - do not allow the bank to have attracted and borrowed funds that do not generate income, except for the part that ensures the formation of required reserves;
• - seek the necessary credit resources for the bank to fulfill its obligations to clients and develop active operations;
• - ensure that the bank receives profit by attracting “cheap” resources.

The current economic situation forces banks to change their policy in the field of passive operations through diversification of deposit operations.

Increasing competition between banks and other financial institutions for deposits of individuals and legal entities has led to the emergence of a huge variety of deposits, their prices and service methods. According to some foreign experts, in developed countries there are currently more than 30 types of bank deposits. Moreover, each of them has its own characteristics, which allows clients to choose the most appropriate and possible form of saving money and paying for goods and services that suits their interests.

The most important link in the work of a bank for a private depositor is the bank’s advertising fame, then the extensive system and the availability of various flexible schemes for interaction with the client, as well as the anti-crisis measures demonstrated by the bank that can protect and preserve the funds invested in the bank. It is also important what kind of relationship the bank has with the state, since it is the state that is beginning to gain more and more weight in the minds of citizens.

Thus, in order for the bank to have a guaranteed opportunity to attract representatives of the general public, it is necessary to fulfill, first of all, the listed conditions. For businessmen representing the interests of enterprises, the factors of information security, confidentiality and reputation come first. This is fully justified due to the non-decreasing criminalization of the commercial sphere.

And yet, for the average Russian, the problem of investing comes down to a choice between a bank deposit, a few types of securities and money in hand. But, in spite of everything, deposits rightfully remain among the population the most popular way of saving and accumulating funds.

From the above it is clear that deposits among the bank's attracted funds are an important source of resources. However, such a source of formation of banking resources as deposits also has some disadvantages. It's about first of all, about the bank’s significant material and monetary costs when attracting funds on deposits, and the limited availability of funds within a particular region. And yet, competition between banks in the credit market forces them to take measures to develop services that help attract deposits.

In global banking practice, all attracted resources according to the method of their accumulation are grouped as follows:

Deposits;

Non-deposit raised funds.

Deposit(deposit) is the transfer of funds to the bank under an agreement for a certain period or on demand. Investors are creditors of the bank, the bank has obligations in relation to them; it is obliged to return the deposited amount on time and pay the interest specified in the agreement.

The main part of the attracted resources of commercial banks consists of deposits, i.e. funds deposited into the bank by clients - individuals and legal entities.

The following may act as subjects of deposit operations:

state enterprises and organizations;

government agencies;

cooperatives;

joint stock companies;

mixed enterprises with foreign capital;

party and public organizations and foundations;

financial and insurance companies;

investment and trust companies and funds;

individual individuals and associations of these individuals;

banks and other credit institutions.

The objects of deposit operations are deposits - amounts of money that the subjects of deposit operations deposit into the bank for a certain time, deposited in bank accounts due to the current procedure for carrying out banking operations.

By mobilizing temporarily free funds of legal entities and individuals on the credit market, commercial banks use them to satisfy the economy’s need for additional working capital, facilitate the transformation of money into capital, and meet the population’s needs for consumer credit. In addition, deposit money is the cheapest of the bank's credit resources.

Based on the fact that customer funds in settlement, current and other accounts account for up to 80% of funds attracted by the bank and more than a third of all bank resources, special attention is paid to the analysis of deposits. At the same time, they solve problems

analysis of the dynamics and stability of deposits, their use

assessment of the structure of deposits and their structural changes

assessing the influence of individual factors on changes in the total amount of deposits (deposits) and the average size of the deposit (deposit)

The assessment of the dynamics of deposits (deposits) of the population is carried out using a system of indicators for the analysis of dynamics series: absolute growth, growth rate, growth rate and their average levels, taking into account:

A) turnover on receipt of deposits (P)

B) turnover on the issuance (disposal) of deposits (C)

C) absolute increase in the amount of deposits (P-V = O k - O n)

D) The influx coefficient (K p) of the deposit is assessed as the ratio of the absolute amount of the influx of deposits (P-V) to the balances of deposits at the beginning of the period, or as the growth rate:

K p = (P-V)/O n = (O k – O n)/O n

D) The level of deposit of funds (subsidence coefficient - K o) received in deposits

K o = (P-V)/P

The average shelf life of a deposited ruble, reflecting the dynamics of the stability of deposits, which is important for assessing deposits as short-term lending resources:

Where – average balance of deposits for the analyzed period

or

D – number of calendar days in the period

B – turnover on issuance of deposits

An indicator of the use of deposits of attracted funds is the deposit utilization ratio (K id):

K id = C av / P av, where C av is the average loan debt for the period;

R av - average balances for all attracted resources.

A deposit utilization ratio of more than 0.75 indicates an aggressive credit policy of the bank, less than 0.65 indicates a passive one.

An assessment of the structure of deposits is necessary for planning the bank's credit resources, since the presence, for example, of a large share of time deposits allows the bank to use these funds as credit resources or other investments, and to plan investments. To assess the structure of deposits, indicators of the share (share) of a certain group of deposits in their total volume are used, i.e.

Relative structure size (in percent):

,

Where d i- share i- groups of deposits in their total volume;

N i number (amount of deposit balance) in group i;

N  total number of accounts (sum of deposit balances) of the population.

Analysis of structural changes is carried out based on indicators:

a) average linear deviation

;

b) standard deviation:

c) K.Gatev Index 

d) Salai Index 

Deposit accounts are grouped:

by forms of withdrawal of deposits:

a) on demand (without a specific withdrawal period)

b) urgent (having a certain period of withdrawal)

c) conditional (subject to withdrawal upon the occurrence of pre-agreed conditions)

according to the storage period of funds

• from 2 to 7 days

  from 8 to 30 days

  from 31 to 90 days

  from 91 to 180 days

  from 181 to 1 year

  from 1 year to 3 years

  over 3 years.

Changes in the structure of deposits influence changes in the total balance of deposits. The change in the total balance of deposits (W) occurs under the influence of three factors:

1) number of deposits (f);

2) deposit structures (d i);

3) average deposit size (x i)/

The balance (amount) of deposits as of the reporting date (W 1) can be presented as a product:

W 1 = W 0 * I  f * I structural shifts * I constant. Composition

where W 0 is the balance (amount) of deposits as of the base (previous) date;

I  f - change in the total number of deposits.

The absolute increase in the amount of deposits under the influence of changes in the total number of deposits in the bank ( w /  f) is determined by the formula:

 w /  f = W 0 * (I  f - 1),

where I  f =  f 1 /  f 0 .

The influence of the second factor on the change in the total amount of contributions ( w / I structural shifts) is determined by the formula:

 w / str. shifts = W 0 * I  f * (I structural shifts - 1),

where I of structural changes is determined by the formula

I structural shifts =  d 1 x 0 /  d 0 x 0,

The absolute increase in the amount of deposits due to a change in the average deposit size ( w / x) is determined by the formula:

 w /х = W 0 * I  f * I str. Shifts * (I post. Composition - 1)

The sum of factor increases (decrease) gives the total change in the balance of deposits for the analyzed period in absolute terms, i.e.

 w /  f +  w / str. Shifts +  w /х =  w

One of the areas of deposit analysis is the calculation and analysis of the average deposit size based on power and structural averages: median, quartiles, deciles.

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Sections

Evaluation of deposit and credit operations of a commercial bank

Page 1

The Bank represents wide range banking services to organizations in all sectors of the economy, large, small and medium-sized enterprises

The bank takes into account the specifics of each client’s activity and provides financial services taking into account his needs - for the successful conduct and development of business. The main principle in working with corporate clients is effective solutions, Newest technologies, individual approach, high standards of service. Experience and professionalism in its work allowed the bank to win the trust of more than 30 thousand organizations and companies.

Bank clients have the opportunity to place available funds on favorable terms for business: individual terms of placement; flexible rates; guarantee of safety of funds and secrecy of deposits; receiving income from storing funds on deposit.

In order to promote the development of business relations between the bank and clients, and increase customer loyalty to the bank, the bank has been holding the “Best Client” competition among legal entities since 2005. In order to identify the share of deposits from legal entities, it is advisable to analyze the structure of the bank's deposits. (Table 2.2.1) The share of deposits from legal entities is clearly shown in Appendix 2.

Table 2.2.1. Share of deposit investments from legal entities in the total structure of raised funds from 01.01. 2008 to 01/01/2010

Index							Deviations 2008–2009		Deviations 2009–2010
	Amount, thousand rubles.		Amount, thousand rubles.		Amount, thousand rubles.		abs., thousand rub.		abs., thousand rub.
State deposits
Deposits of legal entities
Deposits of individuals

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