Friday September 19, 2014 Search
Weather | Athens
27o C
19o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Banks reluctant to issue credit

 Lenders are wary of the upcoming ECB stress tests and institutional handling of nonperforming loans

By Yiannis Papadoyiannis

The improvement in the liquidity conditions at Greek banks, through share capital increases, bond issues and growing deposits, has had no impact on the real economy as it has not been translated into new loan issues.

Local lenders’ reluctance to channel fresh credit into the economy is due to two major factors of uncertainty: the upcoming stress tests by the European Central Bank, which threatens them with new capital requirements, and the way the issue of nonperforming loans will be handled institutionally. The subject of bad loans is also associated with the thorny issue of restructuring problematic and overindebted companies.

According to Bank of Greece figures, despite the positive course of the economy and the exceptionally good tourism figures, the balance of loans did not grow last month but in fact declined by 324 million euros. This meant that the repayment of old loans by far exceeded the issue of new ones. This figure was even higher than that for June 2013, when the balance had lost 212 million euros on a yearly basis.

The question therefore is, if banks have drawn liquidity of over 10 billion euros in the last few months, why should credit expansion remain stuck at the negative rate of 3.5 percent?

Senior bank officials tell Kathimerini that the low credit flow is not peculiar to Greece but is observed in most eurozone countries, mostly due to the European Central Bank stress tests.

This is seen to have minimized the effect of the ECB’s recent economy-boosting measures.

The 3.5 percent rate of credit contraction in Greece last month was the same as in May. It is mostly due to the reduction in the net flow to enterprises as the balance of corporate loans was reduced by 266 million euros, while the annual rate of corporate credit shrinkage came to 4.7 percent.

In contrast, there was an expansion in credit issued to the self-employed, farmers and individually owned enterprises.

Credit to this category increased in June by 71 million euros or 1.5 percent from June 2013, compared with a 1 percent increase in May.

ekathimerini.com , Friday Jul 25, 2014 (21:59)  
ECB eyes banks’ capital quality as target for supervisory power
EIB signs deals with Greece for 815-mln investment in infrastructure projects
Local lenders draw 5 bln for loans to SMEs
Tourism drives jobless rate down
Homeless man falls to death from shelter in central Athens
A man aged between 40 and 45 years old fell to his death from the fourth floor of a homeless shelter in central Athens on Friday morning. Authorities said they suspect that the homeless man,...
Syntagma metro station to close for Fyssas tribute concert
Syntagma metro station will be closed from 4 p.m. on Friday due to a concert that will be held in the square to mark the one-year anniversary of rapper Pavlos Fyssas’s murder by a Golden Daw...
Inside News
SOCCER
Triumph for PAOK, historic result for Asteras in Europa League
Greek teams produced a patchy record on the opening night of the Europa League group stage on Thursday, as PAOK thrashed Dynamo Minsk, Asteras Tripolis snatched a draw at Besiktas and Panath...
SOCCER
Financial crisis forces Greek second division postponement
Greece's second soccer division Football League announced on Wednesday the postponement of the start of the season due to financial difficulties being faced by most clubs. "The board of dire...
Inside Sports
COMMENTARY
High stakes after the Scottish vote
We will soon know whether the Scots voted for their country’s independence or whether they will remain citizens of the “United Kingdom of Great Britain and Northern Ireland.” What was alread...
COMMENTARY
Greek society’s and lenders’ fatigue
The issue of early elections continues to dog the coalition government despite all the official denials. That the administration is losing its cool is obvious. The political discourse has no...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Homeless man falls to death from shelter in central Athens
2. Syntagma metro station to close for Fyssas tribute concert
3. Samaras heads to Azerbaijan for two-day visit
4. Dozens of arrests at march to mark anniversary of Fyssas murder
5. ECB eyes banks’ capital quality as target for supervisory power
6. EIB signs deals with Greece for 815-mln investment in infrastructure projects
more news
Today
This Week
1. EIB signs deals with Greece for 815-mln investment in infrastructure projects
2. ECB eyes banks’ capital quality as target for supervisory power
3. Samaras heads to Azerbaijan for two-day visit
4. Dozens of arrests at march to mark anniversary of Fyssas murder
5. Syntagma metro station to close for Fyssas tribute concert
6. Homeless man falls to death from shelter in central Athens
Today
This Week
1. Greece on standby
2. Greece at bottom of social justice scale among EU28
3. Central Athens traffic restrictions back in force on Monday
4. Lost in the fog
5. Democracy under Pressure | Live Streaming
6. SYRIZA spokesman suggests gov't sought to stop NERIT airing Tsipras speech live
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.