According to the data of the Central Bank of Bosnia and Herzegovina (CBBH), at the end of September 2019, the total household deposits with commercial banks in BH amounted to KM 12.89 billion, which is the highest recorded level.
Observing household deposits by maturity structure, time and savings deposits in September 2019 amounted to KM 5.66 billion or 43.9% of the total household deposits, of which short-term deposits amounted to KM 478 million and long-term deposits to KM 5.18 billion. Transaction accounts and demand deposits accounted for KM 7.23 billion or 56.1% of the total household deposits.
Citizens in BH have been continuously increasing their deposits, thus the increase was as much as KM 1.06 billion or 8.9% compared to the end of September last year. However, there are significant differences in the pace of growth depending on the type of deposit. The fastest growing were transaction accounts, which increased by 17.3% (KM 562 million), followed by demand deposits, which increased by 9.4% (KM 293 million). Time and savings deposits, which reflect real savings, were also growing, but at a slower pace, and on an annual level they increased by 3.8% (KM 204 million), which indicates that citizens still do not have possibilities for abundant long-term savings. However, it should be taken into account that there are other forms of savings, such as insurance policies, etc.
In terms of currency structure, household deposits in the local currency amounted to KM 5.52 billion, which is 42.8% of the share, which is significantly higher than 6 years ago when the share of deposits in the local currency was 38%. Deposits in euro amounted to KM 6.74 billion or 52.2 %, while deposits in other foreign currencies amounted to KM 638 million or 5%.
Citizens decide to save for a number of reasons and motives – for extraordinary circumstances and emergencies, for worrying about a possible decline in purchasing power in the future, for larger or smaller purchases, to afford something, to avoid borrowing, for old age to supplement pension or health insurance.
A stable domestic banking sector, with a reliable deposit insurance system, provides a guarantee to the citizens to keep their funds in their bank accounts, through which they carry out current transactions or save for later periods. Household deposits’ share in the total deposits with commercial banks is the highest, 55.2%, therefore representing an important basis for financing and functioning of banks. Based on this trust and the trusted resources of citizens, banks are able to finance and contribute to a more efficient functioning and growth of the economy, and to help reduce informal transactions.