VTB’s Record Deposits: A Mask for Russia’s Deepening Wealth Inequality
The Russian government prefers to prioritize geopolitics, digging into historical narratives in its grandiloquent, windy addresses to the people, judging history, and pontificating on the economy, all while deliberately distorting facts and presenting outright falsehoods as heavenly manna.
On August 19, 2024, at 10:00 AM, an article titled “Savings Market Heats Up: VTB Reports Record Growth in Deposits Due to Interest Rates” was published on the website banki.ru.
Let us present this article to the reader:
“The savings market is growing at a record pace, VTB reported. Since the beginning of the year, the bank’s portfolio of ruble liabilities has grown by 32%, exceeding 8 trillion rubles (approximately 68 billion pounds sterling). The volume of attracted funds increased by more than 1.9 trillion rubles (about 16.15 billion pounds sterling). The total savings portfolio of VTB’s retail clients has surpassed 8.8 trillion rubles (approximately 70.4 billion pounds sterling). The growth since the beginning of the year has been 28%. It is forecasted that the volume of ruble liabilities in August may reach 48.2 trillion rubles, and by the end of the year — 51.9 trillion rubles. The growth for 2024 is expected to be 26%.
Since the beginning of 2024, VTB clients have opened more than 3 million deposits — 1.6 times more than in the same period last year. The total volume of term deposits has increased by nearly 29% — more than 1.3 trillion rubles. Interestingly, clients also show stable interest in savings accounts. In 2024, more than 3.8 million VTB savings accounts have been opened, with their portfolio volume reaching 1.5 trillion rubles. It was also reported that every second VTB account holder is also a salary or pension client of the bank.
Since the beginning of 2024, the number of VTB clients who have placed funds in deposits or savings accounts has grown by 20%, reaching 7 million people.
“The savings market is heating up and continues to grow at a record pace. Interest rates on ruble instruments have remained high for 8 months and are increasingly attracting depositors to deposits and savings accounts. Our ruble liability portfolio has already exceeded 8 trillion rubles. We forecast that by the end of 2026, we will achieve our strategic goal — increasing the volume of ruble liabilities to 11 trillion rubles,” commented Dmitry Breitenbicher, Senior Vice President of VTB.
Currently, deposits combine the main attractive features of savings instruments, notes Bogdan Zvarich, Chief Analyst at Banki.ru.
“The first thing to note is that they are simple to use and understandable for citizens in terms of generating returns. At the same time, deposits carry low risks, thanks to the deposit insurance system, which protects funds in bank accounts up to the insured amount of 1.4 million rubles.
A significant advantage of deposits at the moment is the high interest rates that banks are willing to offer citizens for this product,” says the expert.”
The article describes the growth of VTB bank clients’ savings and suggests that this signifies an increase in the population’s well-being. However, it is crucial to examine how these savings are distributed among the population and to whom they actually belong. As statistics are deliberately hidden from the public — evidently, our “pious” has got something to conceal — we will use even newspaper headlines to show the reader in whose hands the capital is concentrated in contemporary Russian society.
Thus, it is stated that:
– the total volume of savings is 8.8 trillion rubles, which is equivalent to 74 billion pounds sterling,
– the number of clients is 7 million people.
The average deposit is: 8.8 trillion rubles divided by 7 million people equals 1,257,000 rubles, which is approximately 10,050 pounds sterling per depositor.
However, this average figure does not reflect the actual distribution. According to Rosstat, more than 60% of the population of Russia has a monthly income of less than 40,000 rubles, which is approximately 320 pounds sterling. This means that such people cannot afford significant savings, and their deposits are likely minimal.
Stratification and Inequality
Even from the coarse figures available, it becomes evident that small depositors constitute the majority, while the principal assets are concentrated in the hands of the large ones. Applying the Bolshevik method of calculation, one can assume that a significant portion of these 8.8 trillion rubles is concentrated among a relatively small number of large depositors. If 10% of the bank’s clients hold 80% of all savings, it means that 700,000 individuals control 7.4 trillion rubles, which is approximately 56.3 billion pounds sterling. The remaining 6.3 million people hold only 1.7 trillion rubles, which is roughly 14.5 billion pounds sterling. This corresponds to the following average deposits:
Ten percent of large depositors: 7.4 trillion rubles divided by 700,000 people equals 10,057,000 rubles per depositor, which is approximately 84,000 pounds sterling.
The remaining ninety percent: 1.76 trillion rubles divided by 6.3 million people equals 279,000 rubles per depositor, which is roughly 2,200 pounds sterling.
From this, it is evident that, no matter how “skilfully” the bank’s scribes wish to present it, as if the population of the country holds a greater share of monetary assets, as if all the capital, or rather, the greater share of 80%, is concentrated in the hands of the population rather than enterprises — the reality is quite different. Ten percent of the wealthiest clients hold 80% of the capital, while 90% of the remaining clients hold only 20%.
The fact is apparent. All that our Russian government offers the people is to assure them of some stability, of economic stability, and of the supposedly stable and correct governance by the government itself.
It is necessary to highlight the main emerging fact: the concentration of monetary assets, which constitute the capital in general, does not occur in the hands of the population, but in the private banking institutions, where it is gathered and concentrated. In other words, the increase in deposits indicates not a rise in “popular” savings but merely a growth in the accumulation of monetary resources in banking-industrial institutions.
Behind the Numbers: How Russia’s Savings Growth Reflects a Deepening Class Divide
Thus, the reader now has tangible material to assess the reasoning of our admirers of police and tsarism. One may now interpret the statements about depositors and the “growth of popular prosperity.” In reality, it is the number of bourgeoisie that is increasing, which organizes and forms joint-stock companies, which, in turn, are absorbed by larger companies, thus contributing to the development of the proletariat, who live solely by selling their labor power and giving fragments of their meager incomes to these very banks. The multitude of small depositors (bank clients) proves precisely the vast extent of poverty in contemporary Russian capitalist society, for the share of these small depositors — bank clients — in the total amount of accounts and deposits is insignificant.
The question arises: for what purposes and how exactly are the capitals concentrated in banking-industrial groups used? In Russia, these capitals primarily strengthen the power of the military and police-bourgeois state. The pseudo-tsarist government manages these capitals with the same lack of control as all other public property that falls into its hands. The aristocratic government calmly directs hundreds of millions in “borrowed” capital towards funding its military expeditions, handouts to capitalists and large landowners — Patrushevs and Medvedevs — for arming private armies of Kadyrovs, Keosoyans, and others.
The Russian treasury makes a very advantageous deal for itself: firstly, it covers all banking expenses and receives net profits (which were previously used as reserve capital by the banks); secondly, it forces bank clients to cover the shortcomings of our state economy (compelling them to lend money to the treasury, endowing itself with the right to use clients’ money)… What is there to fear from deficits caused by the squandering of money on wars! From “popular savings,” a substantial sum can always be covered!
It is necessary to note further that the treasury profits in part because it persistently lowers the interest rate on cash deposits while increasing the rate on securities. For instance, in 2015, the interest rate on cash deposits was 18% in March, but by April of the same year, it had dropped to 16%. By 2024, the deposit rate is no more than 8%. As of August 2024, the rate on deposits is 8%, while the rate on securities is 10.2%.
This decline in interest rates is, as we know, a phenomenon common to all capitalist countries, and it vividly and graphically demonstrates the growth of large capital and large-scale production at the expense of the small, for the interest rate is ultimately determined by the relation between the total sum of profits and the total sum of capital invested in production. Here we cannot overlook the exploitation of doctors and teachers, postal workers, in short, those who “subsist” on the budgetary handouts from our “most holy government.” Nor can we ignore the cuts that rain down on the heads of the people every day under the names of “optimization” and “digitalization,” which require enormous expenditures. Yet any sensible worker will agree that work has become harder, that the intensity of labor has increased in proportion to the cuts and “optimization.” One person now performs the work of two for the same pay. And as for pay, our treasury, under the bravado and slogans of fighting for “Russian culture and traditions,” acts like the stingiest miser. The lowest-paid doctors receive wages barely above starvation level, and then a never-ending ladder of grades with 1,000-ruble increment is established, with the prospect of a pittance for a pension after 65 to 70 years of toil meant to further enslave this true “budgetary proletariat.”
But if we return to the use of banking capital in Russia, we see that our banks, under the government’s directive, invest capital in railways, in agriculture, in the construction of gas pipelines, and so on.
Through the banks, an increasing number of workers and small producers become participants in large enterprises. This is an undeniable fact. But this fact does not prove an increase in the number of property owners; rather, it shows:
– The growth of the socialization of labor in capitalist society.
– The growing subordination of small production to large.
Take the small Russian depositor who has 105,000 rubles. Does he become the owner of a gas pipeline? Does he become the owner of land that belongs to the Patrushev and Medvedev corporations? Does this make him a “propertied” person or “owner”? No, he remains a proletarian, forced to sell his labor power, that is, to enter servitude to the owners of the means of production and technology. His “participation” in the “gas pipeline” or “agriculture” only proves that capitalism increasingly intertwines individual members of society into distinct classes. The interdependence between individual producers has become so close that labor becomes social, and enterprises are less “private,” while still remaining almost entirely in private hands.
The small depositor, by participating in a large enterprise, undoubtedly becomes intertwined with that enterprise. But who ultimately benefits from such an arrangement? Large capital win, which expands its operations, paying the small depositor no more than any other creditor and being, all the more, independent of small depositors the smaller and more fragmented they are. Without a doubt, the facts show and prove how small the share of small and medium depositors is in the total capital. How insignificant and negligible is their share in the capital of the oil and gas and banking kings.
The masses, using bank deposit services, handing over their meager savings to the disposal of banking-industrial corporations with the ridiculous “state” prefix, fall into a new dependency on large capital. The small depositor does not even consider controlling this large capital. And the profit from small deposits? It is laughably small: its fluctuation from 7% to 9% gives 100,000 rubles [which is 836 pounds sterling and 84 pence] under 7% annually — 7,000 rubles a year [equivalent to 58 pounds sterling]. But when a crash occurs, he loses all his crumbs. (Deposit insurance funds typically wash their hands of it, finding thousands of reasons to avoid their insurance obligations.) — from the book “The Power of Self-Seekers and Grabbers,” Volume 2, Chapter “The Giant Growth of People’s Savings,” by Catherine Kirelina and Alex Zarin.
The strengthening of the power of large capital, which even obtains the tiniest crumbs of popular savings at its disposal, is evident. Many high-ranking officials, including leaders of the army and navy, are personally connected to financial-industrial concerns that belong to the clique, that is, the autocratic caste close to the throne. What kind of gigantic growth in popular savings does the Russian government, representing the interests of banking-industrial corporations and monopolist landlords, proclaim?
Author of the Article
Catherine Kirelina
