Household and corporate deposits in Greek banks posted an increase of 2.5 billion euros at the end of December compared to a month earlier, reaching 126.3 billion euros. However, the total amount of deposits in local lenders recorded a monthly decline, from 138.6 billion euros at end-November to 137.8 billion at end-2017, due to the withdrawal of state sector deposits.
According to detailed data published by the Bank of Greece on Friday, central government deposits in the commercial banks fell by 3.4 billion euros last month to 11.5 billion, from 14.7 billion euros a month earlier. This constitutes a 23 percent decline.
Part of this, amounting to 1.5 billion euros, is due to handouts in the form of the so-called social dividend, and the payment of subsidies to Public Power Corporation, among other outgoings. Given that there was no disbursement of a bailout tranche in December, the decline recorded is the result of the reduced liquidity that state entities had in commercial lenders, just as state cash reserves are being transferred to the central bank’s special account.
It was the social dividend, as well as the inflow of agricultural subsidies from the European Union and private sector workers receiving their Christmas bonus, that led to the increase of 2.5 billion euros in private deposits. A closer analysis shows that the deposits of enterprises fell marginally from the month before, by 105 million euros, while household deposits grew 2.6 billion.
In total, the deposits of households and enterprises in 2017 enjoyed a moderate increase of 6.6 billion euros, which along with the deposits of the general government sector add up to a 6.9-billion-euro advance. This is still a far cry from the 40 billion euros or more in deposits that left the system from 2014 to 2015.
Bank sources say that January will be a month of decline, as is normally the case, while the weak increase in deposits in 2017 reflects the lack of liquidity in financing the economy, with credit contraction amounting to 0.9 percent last year.