Wednesday, December 1, 2021

Bank deposits at record levels

Total deposits held at commercial banks have grown to their highest level, with growth mainly coming from households, maintaining a cautious stand amid the uncertainty of COVID-19 pandemic that continues to affect business activities, heightening risks of job losses.

The recent Botswana financial statistics for May, covering the first four months of the year, show that total deposits increased by P4 billion to P83.9 billion in April. The biggest mover was the household deposits which increased by P2.2 billion to P19.7 billion, accounting for 23.5 percent of total deposits, a record for household deposits. 

Funds which belong to businesses were  up by P1.1 billion, bringing the total to P61.5 billion, with the bulk of the funds, P54.1 billion belonging to private businesses while P6.2 billion is deposits from parastatals and P1.1 billion held by non-resident businesses. Businesses as well have been holding back on investment and expansion plans as they assess the direction of the economy which had its biggest contraction last year as gross domestic product declined by 7.7 percent. 

Since businesses account for 73.4 percent of the total bank deposits in commercial banks, a large portion of the deposits is held through call accounts, which in April held P22.5 billion. Current accounts, usually used by individuals, held P22.5 billion, while the 1-month fixed deposits were valued at P16.3 billion, the 3-month fixed deposit accounts contained P3.1 billion, and the 6-month fixed deposit held P18.2 billion.

Deposits held for 12 months came at P5.8 billion, and the funds fixed for over a year were valued at P1.9 billion. Savings accounts account for 7.4 percent of total deposits or P6.2 billion. 

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