Data from the Central Bank of Bosnia and Herzegovina (CBBH) at the end of September 2020 illustrate that total household deposits with commercial banks in Bosnia and Herzegovina reached a record-high amount of BAM 13.35 billion.
Household deposits hold by far the largest share of total deposits with commercial banks with 54.9 %, and therefore represent the most important source of funds on the basis of which commercial banks can finance lending activities.
Observed by maturity structure, time and savings deposits of households amount to BAM 5.49 billion or 41.1 % of total household deposits, of which short-term deposits account for BAM 393 million and BAM 5.09 billion long-term deposits. Transaction accounts and demand deposits account for BAM 7.86 billion or 58.9 % of total household deposits.
“In terms of currency structure, household deposits in domestic currency amount to BAM 6.07 billion, making up for 45.4% of total deposits, significantly more than seven years ago when the share of deposits in domestic currency was below 40%. This increase in the share of deposits is a clear indicator of confidence in the convertible mark. Deposits in euros and BAM with a currency clause linked to the euro currency amount to BAM 6.65 billion or 49.8 %, and the share of deposits in other foreign currencies is 4.7%,” the CBBH states in a press release.
The data show that household deposits in Bosnia and Herzegovina are continuously increasing. Consequently, they increased by BAM 454 million or 3.5 % YoY. However, there are significant differences in the trends of deposits depending on the type of deposit. Transaction accounts increased by 13.1 % (or BAM 500 million), while demand deposits surged by 3.6 % (or BAM 124 million). Time and savings deposits, which reflect savings, recorded a slight decline of 3.0 % (or BAM 170 million) on an annual basis.
Despite the expanded banking network and continued trust in banking institutions, a part of the population in Bosnia and Herzegovina still does not have established business relations with banks. According to the World Bank, in BiH, 59% of the population over the age of 15 have opened bank accounts, while only 43% of the inactive population has open accounts. Compared to other European countries, these are quite low percentages, since as many as 95% of the population in the euro area countries have open bank accounts, while in Croatia that percentage is 86% and in Serbia 83%. “On the occasion of the International Savings Day, the use of financial services should be promoted again, which can encourage general development, as they help finance health, education and entrepreneurship, and alleviate financial shocks to the population. Globally, there is a large gap, with those with higher incomes using financial services much more than the poorer ones”, reads the press release.
A stable domestic banking sector, along with a reliable deposit insurance system, provides a guarantee to the population to keep their financial resources in bank accounts, to use financial services more widely and manage their finances more reliably. Based on this trust and the entrusted funds of the population, banks are able to finance and contribute to the more efficient functioning and growth of the economy, and help reduce informal transactions.
“Savings are also the rational attitude towards resources, towards the consumption of water and electricity … Today, savings are reflected through self-sustainable projects, as in every consumed fruit from nature, every cultivated piece of uncultivated land to be planted, and every piece of paper to be recycled. In that way, it transforms into income for future consumption. Our citizens are aware of the importance of savings. Today, it no longer means just taking care on money spending, but also entails a different attitude towards existing resources”, said the Governor of the CBBH, Senad Softić on the International Savings Day. /ibna
(1 EUR = 1,96 BAM)