Greek banks face big challenges this year but are showing resilience to the downturn, said Vassilis Rapanos, president of the Hellenic Bank Association. «The challenges for the banking system remain big in 2010, as its course is linked to that of the economy,» Rapanos, who is also chairman of National Bank, told the annual meeting of the industry group. «The resilience of our banking system remains significant,» he said. Rising nonperforming loans, downgrades to sovereign debt holdings and a deepening recession are seen as hurting Greek bank earnings this year as was already seen in the first quarter. Rapanos said Greek banks had not been exposed to the risks that brought about the global credit crisis and had promptly increased their provisioning for bad debts. Their strong profits in the boom years were invested in Southeast Europe with Greek lenders building a significant presence in the banking systems of the wider area. «Banks… are ready to meet the challenges without limiting their strategic presence abroad,» he said. National Bank, the country’s largest lender, got a foothold in Turkey with the acquisition of Finansbank, which generated 46 percent of group profits last year. Data released yesterday showed that Greek depositors continued pulling their money out of local lenders in April. Figures from the Bank of Greece, the country’s central bank, showed that total deposits held by households and businesses fell to 260.3 billion euros at the end of April versus 278.8 billion at the end of last year. According to press reports, which cited unnamed senior banking sources, the outflow saw a reversal in May, with some 2.5 billion euros being put back into the Greek financial system by depositors. Industry sources have blamed the outflows in the first few months of the year on confusion over whether new tax laws will affect bank deposits. Finance Minister Giorgos Papaconstantinou said yesterday that Greek banks will not have any liquidity problems and that the Cabinet yesterday approved a 10-billion-euro support fund for the country’s lenders.