ECONOMY

Deposits and credit remain in decline

Bank deposits and issued loans continued to decrease in October as the market is still cash-starved and the difficulties that households and enterprises face remain.

At the end of October deposits in Greek banks amounted to 160.3 billion euros, down 1 billion from 161.3 billion euros at end-September, according to lender estimates. Bank officials state that the drop in deposits is to a great extent due to the payment of tax dues. With incomes recording a steady decline over the last few years, more and more Greeks are being forced to dip into their savings to meet their obligations.

At the same time Bank of Greece data showed that the credit contraction continued last month at a 3.9 percent clip, the same as in September. The net flow of total funding to the private sector was negative by 937 million euros, against a negative net flow of 1.04 billion euros in October 2012.

The funding flow to corporations was negative by 737 million euros in October, from -605 million a year earlier, while the annual contraction rate amounted to 4.8 percent from 4.7 percent in September. The credit flow to credit and insurance companies declined by 4.5 percent on an annual basis, compared with 4.1 percent in September. On the other hand, funding to the self-employed, farmers and personal corporations posted a positive net flow of 19 million euros last month, against a negative net flow of 104 million euros in October 2012.

The net flow of funding to private borrowers was negative by 218 million euros, from a negative flow of 328 million euros in October 2012, while the annual contraction rate amounted to 3.5 percent from 3.6 percent in September 2013.