De­posits grew by over 2 bln eu­ros in De­cem­ber 2013

Rate of credit con­tin­ued to con­tract

Kathimerini English - - Front Page - BY YIAN­NIS PAPADOYIANNIS

Do­mes­tic bank de­posits showed a sig­nif­i­cant in­crease of over 2 bil­lion eu­ros in De­cem­ber com­pared to the pre­vi­ous month, al­though this is mostly at­trib­uted to sea­sonal fac­tors rather than a re­turn of de­posits to banks.

Bank of Greece data il­lus­trated yes­ter­day that bank ac­counts had a bal­ance of 163.25 bil­lion eu­ros at the end of De­cem­ber, up from 161.04 bil­lion at end-Novem­ber, or a 1.37 per­cent in­crease. The in­crease came to 1.1 per­cent on an an­nual ba­sis, which re­flects cit­i­zens’ re­luc­tance to put any sav­ings they have left back in the credit sys­tem.

The rise recorded in De­cem­ber is at­trib­uted to the Christ­mas bonus that most pri­vate en­ter­prises dis­trib­uted to their em­ploy­ees, even though pub­lic sec­tor work­ers and all pen­sion­ers have now been de­prived of it. In­ter­est pay­ments from the sec­ond half of the year also con­trib­uted to­ward the in­crease.

Bank of­fi­cials say that the end of the sav­ings out­flow, which started in 2009 and re­sulted in a bal­ance de­cline of 75 bil­lion eu­ros, may be a pos­i­tive de­vel­op­ment, but the re­turn of just 13 bil­lion eu­ros since the low point of June 2012 (at 150.6 bil­lion eu­ros) is far from sat­is­fac­tory. They add that for liq­uid­ity con­di­tions to im­prove sig­nif­i­cantly, for the ben­e­fit of the econ­omy in gen­eral, the num­ber of de­pos­i­tors must in­crease. The po­ten­tial is there, though, as JP Mor­gan stated in a re­cent study

the Hel­lenic Bank­ing Union held a meet­ing with De­vel­op­ment Min­is­ter Costis Hatzi­dakis yes­ter­day to dis­cuss ways to im­prove the flow of credit to en­ter­prises. that de­posits in Greece could grow by as much as 30 bil­lion eu­ros in the com­ing years. For that to hap­pen, the same bank­ing sources note, the econ­omy must re­vert to growth and the risk of po­lit­i­cal in­sta­bil­ity must be elim­i­nated, along with fears of a tax on de­posits.

Other BoG data showed yes­ter­day that the credit con­trac­tion in De­cem­ber amounted to 3.9 per­cent, against an av­er­age con­trac­tion of 2.3 per­cent in the eu­ro­zone, while De­vel­op­ment Min­is­ter Costis Hatzi­dakis held a meet­ing with rep­re­sen­ta­tives of the Hel­lenic Bank­ing Union to dis­cuss ways to im­prove the flow of credit to en­ter­prises.

There was an ex­cep­tion to the credit con­trac­tion, as con­sumer loans is­sued last month rose by 63 mil­lion eu­ros from Novem­ber 2013, con­sti­tut­ing the first monthly in­crease in more than three years.

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