BUSINESS

Bank officials forecast return to credit expansion in Q4

By Yiannis Papadoyiannis

Banks are expecting a return to credit expansion in the last quarter of this year after three years of major contraction in the rate of loans issued to the domestic economy.

Credit sector officials say that if the economy does rebound, the number of loans issued will recover in the October-December 2014 period, while in the first half of this year the rate will remain negative and the third quarter will show stability compared with the same period a year earlier.

On an annual basis, the officials expect the credit contraction to amount to 1.5 percent but do not rule out a better picture if the economy makes a faster return to growth.

Since the end of 2010, when the loan balance in the private sector had reached 257.5 billion euros, it has declined by 40 billion euros, or 15.5 percent. Bank of Greece data for end-2013 put the sum of loans to enterprises and households at 217.5 billion euros.

The year with the biggest decline was 2012, when credit shrunk by 9 percent on an annual basis.

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