ECONOMY

Deposit withdrawals came to 8.6 bln in May

Greek bank deposits by businesses and households decreased by 8.6 billion euros, or 5.2 percent, in May after an inconclusive national election raised the prospect of the country?s exit from the euro region.

Deposits fell to 157.4 billion euros from 166 billion in April, the biggest drop since the country joined the 17-nation currency bloc in January 2001, according to a statement by the Bank of Greece on its website on Friday.

Deposits have declined 52 billion euros, or 25 percent, since December 2010. ?Deposit outflows reached a new historic high? after the May election led to ?heightened sovereign risk? and political uncertainty, Manos Giakoumis, a research director for Euroxx Securities SA in Athens, said in an e-mailed note. ?A reversal of the negative trend is anticipated in the post-election period.?

Greece?s new finance minister, Yannis Stournaras, said on Tuesday that 2 billion euros of deposits had returned to the country?s bank system since the June 17 election produced a three-party coalition government committed to honoring the country?s bailout terms.

Alpha Bank SA Chairman Yannis Costopoulos also told a shareholder meeting in Athens on Friday there has been a return of deposits to Greek banks in the last few days. [Bloomberg]