The share of deposits in the source of bank funds decreased significantly from 96.7 percent in the second quarter of 2019 to 47.5 percent in the second quarter of 2020.
This depicts a year-on-year decrease of approximately 49.2 percent.
This was captured in the quarterly bulletin released by the Bank of Ghana on Monday, October 19, 2020.
According to the Bank of Ghana, “the decrease in total deposit for the period under review can be attributed to decrease in both domestic currency deposits and foreign currency deposits”.
The share of domestic deposits in total deposits decreased from 57.8 percent in 2019 quarter two to 36.2 percent by the end of the second quarter of 2020, indicating a sharp decline of about 21.6 percent year-on-year.
The Bank of Ghana intimated that “the decrease in domestic deposits, was reflected in decreases in demand and time deposits. Savings deposits, on the other hand marginally increased when compared with same period in 2020”.
A breakdown of the various types of domestic deposits indicated in a chart presented by the Bank of Ghana shows that, by the end of the second quarter of 2020, demand deposits recorded the highest share of approximately 23.6 percent in domestic deposits, following next after demand deposits is savings deposits contributing about 12.5 percent and then time deposit which came to bear with a minimal share of negative 0.02 percent.
On a quarter-on-quarter basis, however, the share of domestic deposits in total deposits recorded a marginal increase rising from approximately 29.3 percent at the end of the first quarter of 2020 to settle at 36.2 percent at the end of the second quarter of 2020, indicating an upsurge of about 6.9 percent quarterly, the Bank of Ghana added.
This upsurge recorded can be attributed to marginal increases in demand deposits and savings deposits in the quarter under review, the Bank of Ghana remarked.
In the same vein, year-on-year, foreign currency deposits dropped from 38.9 percent recorded at the end of the second quarter of last year to hover around 11.4 percent in the second quarter of 2020, depicting a decline of 27.5 percent yearly.
The decline in foreign currency deposits, was also reflected on a quarter-on-quarter basis, declining from an average of about 12.5 percent at the end of the first quarter to settle at approximately 11.4 percent at the end of the second quarter of 2020.
According to the Bank of Ghana, aside from demand deposits declining year-on-year, “proportion of balances due non-resident banks, and bank capital in the sources of bank funds also declined over the same comparative periods. Balances due non-resident banks decreased from 11.2 percent to 2.1 percent, while bank capital decreased from 19.0 percent to 2.8 percent”.
In conclusion, the Bank of Ghana further asserted that “the main source of funds for the financing of banks assets emanated from the mobilisation of deposits”.
