The Central Bank of Bosnia and Herzegovina (CBBH) congratulates to all citizens and commercial banks the 31st October – World Saving Day, which Bosnia and Herzegovina citizens mark, this year too, with the largest amount of savings deposits, recorded so far.
According to the CBBH data, at the end of September 2018, total household deposits with commercial banks in BH amounted 11.83 billion BAM, the highest level recorded so far. Deposits of households have the largest share in total deposits with commercial banks, being 55.4%, and therefore represent an important basis for financing and functioning of banks.
Observing household deposits by maturity, term deposits and savings deposits in September 2018, amount to 5.45 billion BAM or 46.1% of total household deposits, out of which short-term deposits amount to 500 million BAM, and long-term 4.95 billion BAM. Transaction accounts and demand deposits make 6.38 billion BAM or 53.9% of total household deposits.
Regarding the currency structure, household deposits in domestic currency amounted to 5.54 billion BAM or 46.8% of the share, which is significantly higher than 6 years ago when the share of deposits in domestic currency was 36.4%. Deposits in euro amounted to 5,70 billion BAM or 48.2%, while deposits in other foreign currencies amounted to 591 million BAM or 5%.
The households in BH continuously increase their deposits, thus, compared with the situation at the end of September last year, they increased by as much as 808.9 million BAM or 7.8%. However, there are significant differences in the pace of growth depending on the type of deposit. The fastest growing are the transaction deposits, which grew by 18.0% (or 489 million BAM), then demand deposits increasing by 14.4% (i.e. 311 million BAM). Time and saving deposits, which reflect savings, slightly increased and grew at an annual rate of 0.3% (18 million BAM).
The slower growth of the households term and savings deposits is also affected by the continuous decline in interest rates in recent years. Interest rates on household deposits in the euro currency recorded a continuous decline over the past five years, with lower oscillations. Thus, for time deposits of households in euro with agreed maturity from 1 year to 2 years, they were reduced from 3.279%, the average rate for 2013, down to 1.188% in the first nine months of 2018. At the same time, for term deposits with an agreed maturity over 2 years, they were somewhat higher, but with the same downward trend of 3.945% in 2013 to 1.462% in the first nine months of 2018. For the same period, the interest rates on household term and savings deposits in BAM with agreed maturity from 1 year to 2 years decreased from 3.262% to 1.276%, and for term deposits over 2 years in the range from 3.661% to 1.371%.
A stable domestic banking sector, with a reliable deposit insurance system, provides a guarantee to households to keep their financial assets in accounts in banks, through which they conduct current transactions or save for later times. Based on this confidence and the citizens entrusted funds, banks are able to provide financing and contribute to more efficient functioning and growth of the economy, and to assist in reducing informal transactions.