Bloomberg News

Greek Bank Deposits in February Decline to EU164.4 Billion

March 29, 2012

Greek bank deposits by businesses and households fell for a second month in February as the country struggled to reach agreement with European Union and International Monetary Fund officials on a second aid package.

Deposits dropped to 164.4 billion euros ($218.3 billion) from 169 billion euros the previous month, according to a statement released by the Athens-based Bank of Greece on its website today. The decline in February from the same month a year earlier was 19 percent, the biggest year-on-year drop since the country joined the 17-nation currency bloc in 2001.

Prime Minister Lucas Papademos struggled to reach agreement on terms of a debt swap with private creditors and additional austerity demanded by the EU and IMF in return for a 130 billion-euro bailout throughout the month. Evangelos Venizelos, who resigned as finance minister last week to lead the Pasok party, said on Feb. 15 that Greece was continually faced with new terms for the bailout and that European leaders raising the idea of a euro exit were “playing with fire.”

The drop in deposits last month was the “result of the overall uncertainty about the country’s future,” Athens-based National Securities analyst Panagiotis Kladis said in an e-mail. “Deposit trends are likely to show a gradual improvement after March” as Greece secured the aid and completed the biggest debt restructuring in history, he said.

Deposits declined by 9.8 billion euros, or 5.7 percent, in the first two months of the year, after a 17 percent drop in 2011.

Bank lending to households and businesses fell 3.8 percent in February, compared with a 3.3 percent drop in the previous month, the Bank of Greece (TELL) said in a separate release today.

To contact the reporter on this story: Christos Ziotis in Athens at cziotis@bloomberg.net

To contact the editor responsible for this story: Maria Petrakis at mpetrakis@bloomberg.net


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