Banks are investing in bonds
Greek banks made new purchases of bonds and investment assets amounting to 9.3 billion euros in 2023, financed by the excess liquidity secured through the increase in deposits, as in the absence of sufficient demand for new loans the credit sector is looking for investment opportunities with high yields.
A large part of the excess liquidity continues to be redeployed to the European Central Bank at an interest rate of 4%, despite the repayment of most of the long-term refinancing program, the TLTROs, activated amid the pandemic crisis, ensuring banks’ cheap financing by the Eurosystem as well as more favorable interest rates in the negative interest rate environment of that period.
That stems from the balance sheet figures of the previous financial year published by the banks, according to which portfolio investments represented about 20% of their assets, while another 10% went to the ECB.
The portfolio of banks – most of which is in T-bills and Greek state bonds, as well as in securities of other European states – rose from €52.7 billion in 2022 to €62 billion in 2023, while the net loan portfolio decreased by €4 billion to €149.4 billion.
