Greek bank deposits plunge

Tension between anti-austerity coalition and its creditors pulls Greece back into recession as markets remain doubtful over the country’s future

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Greek bank deposits fell by 5.6 billion euros ($6.15 billion) in April, European Central Bank data showed on Friday, as the pace of outflows picked up and took the balance to its lowest level in more than a decade.

Deposits fell to 139.4 billion euros ($153 billion) from 145 billion euros in the previous month, the ECB data showed. Deposits had risen above 240 billion euros in late 2009.

Greece's tortuous talks with its international lenders on a cash-for-reforms deal over the last four months has sparked uncertainty and fears of capital controls, unnerving savers.

Deposits have been dropping steadily since October, with the liquidity squeeze making Greek banks dependent on emergency liquidity assistance (ELA) from the domestic central bank.

Bank of Greece data on Friday showed that business and household bank deposits fell by 3.5 percent or 4.89 billion euros in April to 133.65 billion euros ($146.8 billion), dropping for the seventh month in a row.

The data confirmed what bankers had told Reuters earlier this week that April's outflows had reached about 5 billion euros.

Banks suffered outflows of 12.25 billion euros in January, 7.57 billion in February and 1.91 billion in March. The ceiling on emergency liquidity they can draw from the Bank of Greece against collateral stands at 80.2 billion euros.

April's outflow brought business and household deposit balances to their lowest level since September 2004 as savers continue to worry over the slow-moving talks between Athens and its EU/IMF lenders.