BUSINESS

Greek bank deposits drop to 13-yr low in September

TAGS: Banking

Greek bank deposits dropped in September after a rise in the previous month, remaining at levels last seen 13 years ago and keeping banks hooked on central bank funding, data released by the Bank of Greece showed on Thursday.

Business and household deposits fell by 423 million euros, or 0.34 percent month-on-month, to 123.47 billion euros, their lowest since November 2003.

They had risen by 1.32 billion euros to 123.89 billion in August.

Property owners had to pay the first installment of a real estate tax in September.

Greek banks have seen only a trickle of deposit inflows in more than a year after the country clinched a third bailout to stay in the eurozone.

They remain dependent on central bank borrowing to plug their funding gap.

The gap between outstanding loans and deposits has forced Greek lenders to rely on borrowing from the European Central Bank and the Bank of Greece to plug their funding holes.

Greece’s banking sector saw a 42-billion-euro deposit outflow from December to July last year.

Capital controls imposed on June 28 last year helped contain the flight but sharply increased banks’ dependence on emergency liquidity assistance (ELA) from the Bank of Greece.

[Reuters]

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