Mortgage credit continued to gallop ahead in June even as total credit expansion in Greece continued a gradual slowdown, data from the Bank of Greece showed yesterday. In its July/August bulletin on conjunctural indicators, the central bank said mortgage loans grew 39.4 percent year-on-year in June compared with a 39-percent jump in the previous month. In the first six months of the year, the increase came to 16.2 percent. Falling mortgage interest rates in the last couple of years, as domestic banks gradually converged their interest rates with European averages, sparked off a mortgage credit boom that has yet to run its course. Unlike mortgage credit, the pace of growth in consumer credit in June appeared to be slowing down, even though the rate of increase was a robust 32 percent year-on-year, down from 34.6 percent in May. Growth in the first half of the year was 10.5 percent. Non-performing loans may come to haunt banks in the future because of the lax credit-screening standards used by the sector, Bank of Greece Governor Nicholas Garganas told bankers early this week. The central bank plans to reinforce provisions governing non-performing loans by drafting a Governor’s Act, which will increase the number of factors used when calculating default risks. Garganas also told bankers to conform to last week’s court ruling against Commercial Bank which held that 15 clauses in the bank’s mortgage loan agreements violated the law. In spite of double-digit growth in mortgage and consumer credit, the domestic market is still significantly below European averages. Total credit in June expanded by 19 percent year-on-year, against 19.2 percent in May. In the half-year period, the rate of growth was 8 percent.