Deposits return at a very slow pace

The increase in Greek bank deposits in the period from May to August has exceeded 2.5 billion euros, with banks expecting greater inflows once the second bailout review is completed.

Local lenders have created a series of products that act as incentives to attract deposits but they are also waiting for an improvement in the overall economic climate before they ramping up their efforts. They consider a timely wrap up of the second review as a crucial element to the strengthening of confidence.

Despite the rise in deposits between May and August by 2.5 billion euros, the total increase since the start of the year has amounted to just 500 million euros – from 123.4 billion euros in end-December 2015 to 123.9 billion in end-August – because the major delays to the completion of the first review weakened rather than strengthened confidence.

Furthermore, September was a month with major tax obligations for Greek households, which should have a bearing on the level of deposits at the end of last month. Still, banks are optimistic that there is significant scope for a deposit return as plenty of cash is understood to be hidden in mattresses and safe deposit boxes.