ECONOMY

Deposits and loans keep shrinking

Household and corporate deposits in Greek banks posted a further decline in January, resulting in local lenders becoming even more reluctant to issue loans.

Bank of Greece data showed on Wednesday that the total amount of deposits declined by 5 billion euros in January to 169 billion, from 174 billion in December 2011. In the last 12 months, from February 2011 to January 2012, the outflow of deposits amounted to 36 billion euros.

Credit continued to contract in January at a 3.3 percent clip, increasing its pace from a 3.1 percent contraction in December 2011. Receipts from the repayment of existing loans exceeded new loans issued by about 407 million euros (negative net funding), which has led to the reduction of households and enterprises? debts to banks from 257 billion euros in January 2011 to 249 billion in January this year.

In fact, as far as credit to corporations is concerned, there was a small net funding flow of 206 million euros in January, although on an annual basis it posted a 2.6 percent decline.

The household debt in mortgage and consumer loans declined in January to 112.7 billion euros from 117.5 billion euros in the same month last year.