Deal with creditors buoys deposits
Bank officials are reporting a stabilization and small improvement on the deposits front in May and June, after a particularly negative first four months of the year when private sector deposits shrank by about 2.4 billion euros.
The stabilization of deposits is expected to be confirmed today when the Bank of Greece issues the data for May. Bank sources say the June data will be even more positive even though the recent corporate bond issues have absorbed significant liquidity. They note that half of Mytilineos’s recent bond issue, totaling 300 million euros, was covered by private investors.
The growth in deposits is the result of the banishment of concerns the agreement between Athens and its creditors might fall through, as it had become clear from mid-April that the government was ready to reach a compromise and complete the bailout review.
Credit sector officials tell Kathimerini the deal with the creditors constituted a major step toward restoring confidence and has convinced depositors that the worst has passed – provided that the government implements what it has promised to the country’s lenders.
Banks are now eyeing the more than 10 billion euros in safe deposit boxes and mattresses and the 7 billion euros in foreign bonds that could return to bank accounts.