Bank de­posits post un­ex­pected growth

Kathimerini English - - Front Page - BY YIAN­NIS PAPADOYIANNIS

De­posits posted a sig­nif­i­cant in­crease of about 1 bil­lion eu­ros in De­cem­ber ac­cord­ing to data col­lected by the coun­try’s ma­jor com­mer­cial banks, to reach 162 bil­lion eu­ros.

Bank of­fi­cials say that while this rise in de­posits is a pos­i­tive de­vel­op­ment, it can be at­trib­uted mainly to sea­sonal fac­tors. They ar­gue that be­fore banks can see a sub­stan­tial in­crease in de­posits the coun­try will have to re­turn to a state of com­plete so­cial and po­lit­i­cal sta­bil­ity and that ex­pec­ta­tions for a re­bound of the econ­omy will have to be vin­di­cated with an end to the re­ces­sion this year.

The same sources say that cur­rent liq­uid­ity con­di­tions are far from sat­is­fac­tory as de­posits have grown by just 15 bil­lion eu­ros from their low­est re­cent level, reached in June 2012 when twin gen­eral elec­tions led the bank ac­count bal­ance to just 150.58 bil­lion eu­ros – the low­est since 2005. In fact, de- posits re­mained stag­nant at a level that is 75 bil­lion eu­ros be­low what it was be­fore the out­break of the fi­nan­cial cri­sis. In end-2009 house­holds and cor­po­rate de­posits added up to 237.5 bil­lion eu­ros.

Other, more op­ti­mistic, credit sec­tor pro­fes­sion­als say that the con­tain­ment of the out­flow and the small in­crease in in­flows to bank ac­counts – against ex­pec­ta­tions for a de­cline in the to­tal bal­ance last month due to the pay­ment of mul­ti­ple taxes – is def­i­nitely pos­i­tive and con­sti­tutes the first step to­ward smooth cash flow. This will hap­pen, they say, once the num­ber of de­pos­i­tors grows, lead­ing to liq­uid­ity pass­ing on to the real econ­omy.

In a re­cent anal­y­sis JP Mor­gan es­ti­mated that in the com­ing years de­posits in Greek banks could grow by as much as 30 bil­lion eu­ros.

Bankers say that for cap­i­tal to start re­turn­ing in a sig­nif­i­cant way to ac­counts, the fac­tors that pro­duce and sus­tain the un­cer­tainty – such as the risk of po­lit­i­cal in­sta­bil­ity or of a bank ac­count hair­cut

that for cap­i­tal to start re­turn­ing in a sig­nif­i­cant way to ac­counts, the fac­tors that pro­duce and sus­tain the un­cer­tainty – such as the risk of po­lit­i­cal in­sta­bil­ity or of a bank ac­count hair­cut – have to be erad­i­cated, while the econ­omy re­turns to growth. – have to be erad­i­cated, while the econ­omy re­turns to growth. Sim­ply put, the end of the re­ces­sion will lead to an in­crease in in­comes and there­fore to sav­ings.

From the June 2012 low de- posits grew slowly to 164.14 bil­lion eu­ros in March 2013 and since then have taken a de­clin­ing course, with the lat­est of­fi­cial data by the Bank of Greece show­ing a sum of 161.94 bil­lion eu­ros in Novem­ber 2013.

Loan bal­ances, mean­while, added up to an es­ti­mated 221 bil­lion eu­ros, mean­ing a gap be­tween loans and de­posits amount­ing to about 60 bil­lion eu­ros.

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