Interest on deposits records marginal decrease
Omnibank has emerged as the best place to secure the highest interest on deposits with an average rate of 17.3 per cent, according to the latest Average Interest and Annual Percentage Rate (APR) released by the Bank of Ghana (BoG).
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The report assessed the actual rates changed by some 32 banks, ending the month of June with emphasis on the actual interest charged on loans and credit advances and interest on deposits by commercial banks.
The Bank of Baroda follows closely with an average interest on deposit of 15.4, while the Royal bank closed the month with an average interest on deposit at 14.7 per cent with Stanbic bank awarding 14.1 per cent on deposits.
Energy bank has the very least average interest on deposits of 5.7 per cent. Guarantee Trust Bank closed the month with 7.4 per cent interest on deposit, followed closely by UMB with 7.6 per cent.
The average deposit rate as at June 30 was 10.9 per cent, a marginal decrease of 0.3 per cent, compared to 11.2 per cent at the end of May 31. The industry average on deposit interest rate is 10.9 per cent for the month of June. Average interest paid on deposits is the average interest paid by banks on deposits over the period.
Year-to-date decrease
At the start of the year (end-January), the average deposit rate was 11.9 per cent, giving a year- to- date decrease of one per cent.
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.
On base rate, which reflects the minimum interest rate that can be charged on loans and advances, uniBank tops the pack with the highest rate of 40.9 per cent as at May this year though the bank is currently reviewing the rate for June.
This is followed by the Royal Bank with 35.0 per cent, while Sovereign bank has 34.9 per cent base rates.
Base rate reflects the minimum interest rate that can be charged on loans and advances.
Base rate drops
The industry average base rate as at June 30, 2017 was 26.3, according to the data. This represents a marginal drop of 0.3 per cent, compared to 26.6 per cent at the end of May.
At the start of the year (end-January), the industry average base rate was 27.6 per cent, giving a year-to-date drop of 1.3 per cent.
Bank of Ghana sources say the publication of rates is to promote transparency in the pricing and provision of banking services.
In the April APR report, Standard Chartered Bank was noted as the bank with the lowest interest charged on loans and advances with the base rate of 16.1 per cent.
As at then, the Bank of Baroda offered an average of 17 per cent interest on loans and advances, and pays one of the highest interests on deposits, which averages 15.5 per cent.
Barclays Bank was also very competitive on interest on deposit, loans and advances, with a base rate of 19.1 per cent and interest on deposit of 10.4 per cent.
The report shows that Ghanaian-owned banks charge relatively high interest on loans, compared to the international banks operating in the country.
GN Bank is offering a base rate of 22.2 per cent on loans and 13.2 per cent on deposits while uniBank also offers a 41 per cent, the highest interest charged on loans in the country, and offers 12.6 per cent as interest on deposits. — GB