Bank de­posits edge up­ward in June

Kathimerini English - - Front Page -

Greek bank de­posits rose in June for the se­cond month in a row, data re­leased by the coun­try’s cen­tral bank showed yes­ter­day. Busi­ness and house­hold de­posits rose by 1.04 bil­lion eu­ros, or 0.85 per­cent month-on-month to 122.74 bil­lion eu­ros, their low­est level since Novem­ber 2003. They had edged up to 121.7 bil­lion eu­ros in May. Greek banks have seen only a trickle of de­posit in­flows in nearly a year af­ter the coun­try clinched a third in­ter­na­tional bailout to stay in the eu­ro­zone. They re­main de­pen­dent on cen­tral bank bor­row­ing to plug their fund­ing gap. Greece’s bank­ing sec­tor saw a 42bil­lion-euro de­posit out­flow from De­cem- ber to July last year. Cap­i­tal con­trols im­posed on June 28, 2015, helped con­tain the flight but sharply in­creased banks’ de­pen­dence on emer­gency liq­uid­ity as­sis­tance (ELA) from the Bank of Greece. Last week Greece fur­ther eased cap­i­tal restric­tions af­ter mak­ing head­way on bailout-man­dated re­forms and im­proved con­fi­dence in its bank­ing sys­tem. As part of the re­lax­ation of con­trols, “mat­tress” cash that is re­turned to banks will not be sub­ject to the restric­tions, mean­ing amounts de­posited can be fully withdrawn. Greece’s Deputy Fi­nance Min­is­ter Gior­gos Hou­liarakis told Par­lia­ment ear­lier this month that the govern­ment projects a 3-4 bil­lion-euro cap­i­tal in­jec­tion into banks as a re­sult of hoarded cash be­ing re­de­posited.

Credit ex­pan­sion. The net flow of credit rose 479 mil­lion eu­ros in June, as cor­po­rate loans in­creased by 566 mil­lion, Bank of Greece fig­ures showed yes­ter­day. This was the first month in 2016 when new is­sues out­val­ued loan re­pay­ments. Bank of­fi­cials at­tribute this change to the start of the tourism sea­son.

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