The Central Bank of Iraq announced an increase in the credit-to-deposit ratio to 59.3% in Q4 2024, up from 51.9% in Q4 2023. This metric is vital for assessing bank liquidity and suggests that banks are more effectively utilizing customer deposits for profitability. Part of this increase may stem from enhanced credit to government and central bank entities.
On February 13, 2024, the Central Bank of Iraq (CBI) announced an increase in the percentage of cash credit relative to total deposits for banks operating within Iraq. This growth was documented in the fourth quarter of 2024, showing a ratio of 59.3%, up from 51.9% in the previous year’s fourth quarter.
The CBI emphasized that the credit-to-deposit ratio serves as a crucial indicator of bank liquidity, illustrating how well banks are utilizing customer deposits to generate profits. Factors contributing to this increase may include a rise in credit extended to governmental bodies and the central bank, which aligns with efforts to optimize banking resources for economic growth.
The increase in the credit-to-deposit ratio signifies a positive trend for banks in Iraq, indicating a greater effective use of customer funds. This shift reflects improved liquidity management within the banking sector and potentially enhances economic activity. Enhanced credit provisions to governmental entities may further contribute to this upward momentum.
Original Source: ina.iq
