The value of household deposits in domestic currency in Bosnia and Herzegovina is for the first time higher than deposits in foreign currencies, which indicates the growth of confidence in the domestic currency and the recovery of savings in BiH.
According to the latest available data from the CBBH, total household deposits with commercial banks in BH amounted to BAM 14.22 billion at the end of September 2022.
On an annual basis, household deposits, at the end of September, recorded a drop of BAM 271.8 million or 1.9%, which is primarily a consequence of the withdrawal of deposits and uncertainty due to the war in Ukraine in the period from March to May, followed by the regrowth of deposits. A change in preference in terms of liquidity is observed, as citizens significantly increase their holdings in deposits that are highly liquid and available in the short term (transaction deposits grow by 10.7%), while a 13.8% drop is recorded in term and savings deposits.
By maturity structure, term and savings deposits in the end of September 2022 amounted to BAM 4.70 billion or 33.1% of the total household deposits, out of which, short-term deposits accounted for BAM 356 million (7.6%), while long-term ones accounted for BAM 4.35 billion (92.4%). Transaction accounts and sight deposits amounted to BAM 9.52 billion and accounted for 66.9% of the total household deposits, out of which transaction accounts amounted to BAM 5.72 billion, while sight deposits amounted to BAM 3.80 billion.
In respect of currency structure, a significant change has taken place recently reflected in the total deposits in the local currency exceeding the total deposits in foreign currencies. Deposits in the local currency reached the amount of BAM 7.29 billion accounting for 51.3% of the share, while deposits in euro and in BAM with currency indexation to euro amounted to BAM 6.26 billion or 44.0%. Savings in other foreign currencies was quite modest amounting to BAM 674 million or 4.7% of the share.
Most citizens believe that savings are important, but few of them are able to save regularly on a monthly level, particularly these days when inflation is reducing purchasing power. BH citizens save in order to create some reserves for more difficult periods which might come, and a part of them save in order to finance larger purchases or vacations.
Local deposit institutions are a safe place for local depositors, and regulatory public institutions carefully monitor their operations in order to ensure that household savings are managed in a regulated and safe way.
Household deposits represent the main source of financing for local banks and have by far the largest share of 49.6% in the total deposits with commercial banks, with all the involved institutions devoting much attention to their protection, stated the CBBH.