The Central Bank of Iraq reported an increase in the credit-to-deposit ratio from 51.9% in Q4 2023 to 59.3% in Q4 2024. This increase indicates that banks are effectively utilizing customer deposits for lending, potentially boosted by credit to the government and central bank. The trend reflects a healthier banking environment in Iraq.
The Central Bank of Iraq (CBI) announced a significant increase in the ratio of cash credit to total deposits among banks in Iraq. According to the CBI, this credit-to-deposit ratio rose from 51.9% in the fourth quarter of 2023 to 59.3% in the fourth quarter of 2024, indicating healthier bank liquidity. This metric compares the credit extended by banks to their deposits, showcasing banks’ capacity to leverage these deposits for lending purposes.
The increased ratio suggests that banks are successfully channeling customers’ deposits into profitable credit extensions. It is also noted that part of this rise may result from increased credit extended to governmental entities, including the central bank itself. This development highlights the banks’ improving ability to generate profits from their deposit bases, reflecting a more robust banking sector in Iraq.
The CBI’s report indicates a promising upward trend in the banking sector’s liquidity and profitability. The rise in the credit-to-deposit ratio demonstrates effective utilization of deposits by banks, signaling enhanced confidence among financial institutions in Iraq. This growth may encourage further lending and economic activity in the region.
Original Source: ina.iq
