The average monthly deposit growth was US$113 million, a 9% increase or 26% of GDP.
Loans and advances for the quarter grew by 39,6%, while loans to deposit ratio increased from 55,2% to 57,7%.
According to figures obtained from the Reserve Bank this week, CBZ emerged as the market leader controlling 24,6% of the deposits.
Standard Chartered had 16,7%, while Stanbic received 12,6% of the deposits, Barclays 9% and FBC 7%.
The apex bank said growth in industry loans had been curtailed mainly by the shortage of term deposits.
“The future of the banking sector lies mainly in private/wealth management banking and small and medium-sized business sector,” the bank said.
The bank forecasts deposits for the first quarter of 2010 to reach US$1,69 billion.
Major market movers were Standard Chartered Bank with a market weighted growth of 33%, CBZ 29%, FBC 18%, Barclays 4% and Premier 3%
“Market shakers were Stanbic and MBCA, having market weighted loses of 13% and 2% respectively,” the central bank said.
The market weighted growth for the rest of the banks was 1,4%.
“The high deposit growth rate has had a ripple effect on the stock market as evidenced by high and positive correlation of 80% between the growth rates of deposits and the indices,” said the Reserve Bank.
The bank said one of the reasons for such strongly correlated growth was because of an increase in advances for working capital, thereby increasing capacity utilisation of companies.
Of the deposits, commercial banks accounted for US$1,2 billion or 89,3% while merchant banks handled US$110 million (8,2%), Post Office Savings Bank accounted for US$11,9 million (1,4%) and building societies US$15,7 million (1,2%).
The current industry deposit structure is 46% for 1-7 days, 17,2% for 8-14 days and 27,8% for 15-30 days.
Volatility of banking deposits shows that wealth or income was concentrated in a few hands hence the future of the banking sector lies mainly in private wealth management banking and small and medium-sized business sector.
“Given the recent boom in mobile phones and internet accessibility, another key area for growth will be the telephone and internet (electronic) banking,” the central bank said.
The deposit concentration by the top five banks (all commercial banks) averages 68,4% during the last quarter of 2009.
The increase in bank deposits has enhanced banking sector capacity loans and advances with banks such as CBZ Bank now offering 180 days loans.
Loans and advances for the quarter grew by 39,6% from US$558 million as at 30 September last year to US$779 million as at December 31.
The market monthly average advances were US$613,7 million.
“During the period under review, the industry loans to deposit ratio increased from 55,2% to 57,7%, the bank said.
Growth in loans has been curtailed by the shortage of deposits. The fact that demand deposits restrict banks from providing funding to the productive sectors of the economy limits the rapid take-off of these sectors.
Analysts said default risk remained very high with most loan applications being businesses trying to recover.
Some banks cited high risk profiles associated with some sectors of the economy such as agriculture, resulting in the industry loan book being skewed towards the retail and distribution sector where working capital cycles are in sympathy with the structure of deposits.
Despite a sustained increase in bank deposits during 2009, there was limited interbank trading because of the absence of acceptable collateral instruments and absence of lender of last resort.
Going forward after banks have published their first set of audited US dollar denominated accounts, inter-bank trading may resume although at a slower pace.
“The survival of the sector rests on the restoration of confidence in the sector, an even spread of deposits, ability to attract long terms deposits and recapitalisation of the banking sector,” the bank said.
Bank’s interim financial results in US dollars saw them incurring impairment losses as a result of the multi-currency introduction and such writedowns are minimal in the full year -end results being announced as cost restraining measures have been adopted by most banks.