ECONOMY

Loan growth seen stuck in the red in coming months

Greece?s loan growth is expected to remain in negative territory in the coming months until confidence returns that the Greek government will not default on its debt, Alpha Bank said on Thursday.

Bank of Greece figures showed earlier this week that December?s private sector credit expansion was at minus 0.2 percent, the first time it has slipped into the red since the country joined the euro in 2001, from 0.4 percent in November.

?This trend will gradually reverse when market confidence in the abilities of the Greek state to service its debt returns,? Alpha Bank said in a weekly report.

?Better access by the Greek state to markets means that there will be a respective improvement in the access Greek banks have to markets.?

The country?s lenders are heavily exposed to the country?s sovereign debt and were hurt when interbank credit lines dried up following the country?s near-default last year, leaving them reliant on European Central Bank liquidity.