Deposits grew by over 2 bln euros in December
Domestic bank deposits showed a significant increase of over 2 billion euros in December compared to the previous month, although this is mostly attributed to seasonal factors rather than a return of deposits to banks.
Bank of Greece data illustrated on Wednesday that bank accounts had a balance of 163.25 billion euros at the end of December, up from 161.04 billion at end-November, or a 1.37 percent increase. The increase came to 1.1 percent on an annual basis, which reflects citizens’ reluctance to put any savings they have left back in the credit system.
The rise recorded in December is attributed to the Christmas bonus that most private enterprises distributed to their employees, even though public sector workers and all pensioners have now been deprived of it. Interest payments from the second half of the year also contributed toward the increase.
Bank officials say that the end of the savings outflow, which started in 2009 and resulted in a balance decline of 75 billion euros, may be a positive development, but the return of just 13 billion euros since the low point of June 2012 (at 150.6 billion euros) is far from satisfactory. They add that for liquidity conditions to improve significantly, for the benefit of the economy in general, the number of depositors must increase. The potential is there, though, as JP Morgan stated in a recent study that deposits in Greece could grow by as much as 30 billion euros in the coming years. For that to happen, the same banking sources note, the economy must revert to growth and the risk of political instability must be eliminated, along with fears of a tax on deposits.
Other BoG data showed that the credit contraction in December amounted to 3.9 percent, against an average contraction of 2.3 percent in the eurozone, while Development Minister Costis Hatzidakis held a meeting with representatives of the Hellenic Banking Union to discuss ways to improve the flow of credit to enterprises.
There was an exception to the credit contraction, as consumer loans issued last month rose by 63 million euros from November 2013, constituting the first monthly increase in more than three years.
