BUSINESS

Greek bank deposits rise in December for second month in a row

Greek bank deposits rose for a second month in a row in December thanks to an increase in business cash holdings, central bank data showed on Wednesday.

Businesses and household deposits rose to 163.25 billion euros from 161.04 billion euros in November, the Bank of Greece said.

The increase was almost entirely due to non-financial companies, whose deposits rose by about 3 billion euros from the previous month. Companies' cash holdings usually increase in December.

Bank deposits had declined for five straight months up to October last year as austerity-hit Greeks tapped on savings to cope with economic hardship.

Greek banks lost around 90 billion euros or a third of their deposit base after the country plunged into a debt crisis in late 2009, partly due to capital flight on fears of a euro zone exit.

About 17 billion euros returned to the banking system in the months following a mid-June 2012 election, which led to the formation of a new government and eased fears that Athens would leave the single currency.

The inflows helped ease banks' liquidity strains and their dependence on central bank funding but dried up since March, when Cyprus was bailed out at the expense of bank deposit holders.

[Reuters]

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