ECONOMY

NBG secures orphaned deposits

National Bank of Greece has won the tender for the deposits of three cooperative banks whose operating licenses were revoked last week by the Bank of Greece.

Securing those deposits is crucial for the stability of the domestic credit system, sector officials suggest, and any other development would have raised concerns. They do add, however, that the full coverage by the state of bank deposits threatened due to bad corporate decisions raises issues of morality and about the efficient operation of the market.

Bank clients who had deposits at lenders such as Proton that offered interest rates of 6 percent or the cooperative banks with rates of up to 8 percent now enjoy full capital guarantee, while the citizens who chose to support the country by investing in Greek bonds have lost over 50 percent of their money through the private sector involvement (PSI) plan.

Notably, certain cooperative banks had a non-performing loan rate of over 60 percent.