Customer deposits still remain a major source of revenue for commercial banks.
As a result, commercial banks also bear greater responsibility to their customers in earning interests on such deposits.
The latest banking sector report by the Bank of Ghana shows that deposits accounted for 62.5 percent of the banking industry’s assets as at December 2017.
According to the central bank’s data, total deposits went up by some 6.67 billion cedis between December 2016 and the same period last year.
For the twelve months period, total amounts deposited with all banks amounted to 58.28 billion cedis.
This is up from the 51.66 billion cedis recorded in December of the preceding year.
84.2 percent of all deposits came in as domestic currency while the remaining 15.8 percent came in foreign currency.
Borrowings by commercial banks also came in as the second source of funding for commercial banks accounting for about 16 billion cedis of the funding needs of the banks.
By this, commercial banks were able to raise money for their operations from short and long term instruments.
Although income from loans to customers dropped between December 2016 and the same period last year (46.4 percent in December 2017, from 50.7 percent in December 2016), it perhaps still leads as income generating source for banks.
A situation, the central bank attributed to the drop in lending rates as well as the rising Non Performing Loans.
Meanwhile, the share of income from investments (both short and long term) increased from 33.5 percent in December 2016 to 38.0 percent in 2017, justifying the shifts in banks’ portfolio preferences despite declining money market rates.
Also, the money that the banking industry made from fees and commissions such as ATM card use dropped from 10.6 to 10.2 percent between the twelve month period.
While ‘other’ income, recorded a marginal increase from 5.2 percent to 5.5 percent during the period under review.