Bank bleeding stopped after election

Deposits are trickling back to Greek banks after a conservative victory in Sunday’s election assuaged fears the country was set to crash out of the euro, several Greek bankers said on Tuesday.

Panicked Greeks who had withdrawn up to 800 million euros from major banks daily in the run-up to Sunday’s vote on fears a leftist victory would push the country back to the drachma were now bringing back some of the money stashed at home, they said.

“The bleeding has stopped,» one Greek banker said on condition of anonymity.

One Greek bank that was losing about 30 million euros a day in the days leading up to the election – more than half of which was taken home or put in safe deposit boxes – found the trend had quickly changed course on Monday.

“Yesterday, we saw a reversal. We had about 15 million euros of cash brought back,» the banker said.

However, bankers indicated that private banking clients who had wired money abroad had yet to bring their funds back.

A third Greek banker said inflows of up to 10,000 euros from small savers who had stored cash at home were returning, but that the lender had yet to see large sums of over 50,000 euros being brought back.

“We didn’t have any deposit outflows yesterday and we are expecting a similar picture today,» the banker said.

“The election result helped.”

Deposits have been fleeing Greek banks since the sovereign debt crisis erupted in late 2009, and the tottering banking system relies for liquidity on the European Central Bank and the Greek central bank.

Greece’s banks have lost 72 billion euros in deposits since the start of 2010, or about 30 percent, according to Thomson Reuters data. Five of Greece’s top banks saw 37 billion euros taken out last year, including 12 billion euros from EFG Eurobank and 8-9 billion euros apiece at National Bank of Greece, Piraeus and Alpha Bank.

The outflows picked up pace dramatically before last week’s vote as rumors swirled the leftist SYRIZA party was on track to win. The party, which finished second in the poll, had pledged to rip up the bailout package keeping Greece afloat, prompting fears that European partners could cut off funds and push the country back to the drachma, sharply devaluing bank deposits.

Greek bankers said they were optimistic money would continue to return in the coming days as the conservative New Democracy party made progress in putting together a coalition government to steer the country back from bankruptcy.

“We’ve seen people bringing back cash that they had withdrawn and mostly taken home,» said a banker at a mid-sized foreign-owned lender. «We expect this trend to pick up in the coming days.» [Reuters]

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.