Savers are motivated to buy long-term products, according to the Association of Banks

The Association of Multiple Banks of the Dominican Republic (ABA) reported that changes were reflected in savers’ preferences towards deposits with longer maturities and higher returns.

According to this institution, this is because between 2021 and 2022,deposits or savings deposits in these entities showed a stable behavior, with some changes in their composition.

He explained that deposits are the main source of resources used by multiple banks to carry out their financial intermediation operations, among them, the most important, the financing of credit for households and companies.

In this sense, during the first nine months of 2022total deposits grew at an annual average of 13.9%a rate quite similar to that observed during the same period in 2021 (15.4%)exposed the ABA

“This means that, despite the global economic situation, bank deposits have shown a stable and resilient behavior”, valued the union in a press document.

He recalled that deposits are made up of all types of deposits available in banks: demand deposits, savings deposits, term deposits, securities (certificates) held by the public and interbank deposits. Together, these savings instruments represent approximately 85% of banks’ total liabilities, he said.

“Beyond the stability in its growth rate, it is important to highlight some changes that are observed in terms of the composition of savings”raised the ABA.

In addition, he highlighted that, as of August 2022, long-term deposits increased 64.6% compared to the same month of 2021.

In this last piece of data, it reveals a greater preference of savers for time deposits, which are characterized by having a longer maturity period and higher yields, compared to demand deposits or savings deposits, which reflects the intention of savers to take advantage of the current environment of more attractive interest rates.

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The banking union pondered that, even since 2020, the year of the pandemic, and in the current context, the Dominican commercial bank maintains solid indicators of liquidity, asset quality, profitability and solvency.

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