Bank depositors lose more

Are banks responding to agitations for lower cost of borrowing? Well, it appears so from the latest data released by the Bank of Ghana (BoG).

Indeed, the BoG serves notice that “the industry average base rate as at September 30 was 26 per cent, a marginal decrease of 0.1 per cent, compared to 26.1 per cent at the end of August.”

While that could be a positive sign that borrowers could negotiate for lower cost of credit, a flip side of the issue is that depositors are going to see less gains.

“The average deposit rate as at September 30 was 10.4 per cent, a marginal decrease of 0.4 per cent, compared to 10.8 as at August 31. At the start of the year (end-January), the average deposit rate was 11.9 per cent, giving a year- to- date decrease of 1.5 per cent,” the BoG said.

These set of data are contained in the “Annual Percentage Rates (APR) of interest charged on loans and credit advances and the Average Interest (AI) paid on deposits by banks” published by the central bank for the end of September.  

In all, the list covers 31 banks. 

The central bank said “The publication of these rates is to promote transparency in the pricing and provision of banking services. 

“Bank of Ghana aims to promote accountability of its decision making and build understanding of the monetary policy formulation process among stakeholders through the publication of these documents.”

The APR is the true interest rate banks and non-bank financial institutions charge the public on loans and advances.  It reflects the true cost of borrowing and includes charges and commissions levied by banks. Average interest paid on deposits is the average interest paid by banks on deposits over the period. Base rate reflects the minimum interest rate that can be charged on loans and advances. 

In terms of specifics, the Premium Bank (14.8%), Omni Bank (14.7%) Royal Bank and Bank of Baroda – 14.5% each – offer the highest interest on deposits.

On the other hand, Standard Chartered Bank (4.9), FBN Bank (5.3), Energy Bank (5.7) and ADB (6.2) offer the bottom four lowest rates on deposits.