COMMERCIAL bank deposits, which used to average US$350 million in the first six months of the year, have declined to US$41,8 million this year.
Figures made available by the Reserve Bank show banks deposits had declined significantly as most individuals and corporates are still sceptical about the banking sector.
As of June 30, a total of US$627,6 million was deposited in the country’s 14 commercial banks.
CBZ handled the most deposits amounting US$183,6 million. The banks’ total loans and overdrafts were US$86,1 million during the interim period.
Stanbic bank was second with deposits totaling US$132,1 million, while Standard Charted was third after handling US$89,3 million.
Barclays (US$74 million), MBCA (38,5 million), FBC (US$38,3 million), Kingdom (US$23,5 million), ZB Bank (US$21,9 million), NMB (US$10,6 million), Zabg (US$6,3 million), Agribank (US$3,5 million), Metropolitan (US$2,7 million), TN US$1,8 million and CFX US$783 444
The Reserve bank said deposits increased in May and June after being depressed since January.
“Although there is a gradual increase in the level of deposits, there is no corresponding level of increase in loans and advances,” the bank said.
While some banking institutions have mobilised relatively large amounts of deposits, in some instances this has not resulted in corresponding levels of loans and advances,” the bank said.
Of the country’s six merchant banks, BancABC handled the highest deposits during the period under review of US$18,9 million, followed by Premier Bank with US$11,8 million.
Interfin’s deposits where US$9 million, while those of Rennaisance and Genesis where US$5,4 million and US$1,9 million respectively.
Most banks however have not been offering loans relative to the deposits they have.
“An analysis of the extent of credit extension for the three months from April and June 2009 indicates that lending has been restricted as reflected by the average loans to deposit ratio of 35,83%,” the Reserve Bank said.
Building Societies who provide mortgage loans have not been releasing money on a large scale because their deposits have declined more when compared to commercial and merchant banks.
Of the country’s four building societies, CABS handled the most deposits of US$14,9 million. Beverley was second with deposits amounting to US$2,2 million. ZB Building society and FBC handled US$1,2 million and US$678 887 respectively.
“As monetary authorities, we are greatly concerned with extreme instances of disintermediation at some banking institutions. While we appreciate the need to conduct due diligence and sound risk management, banking institutions should play a meaningful role and contribute to the economic turnaround of the country,” the Reserve Bank said.
BY PAUL NYAKAZEYA