Deposits trickle back into Greek banks after election
- 19 Jun 2012 09:58 (South Africa)
Deposits are trickling back into Greek banks after a conservative victory in Sunday's election calmed fears that the country was set to crash out of the euro, several Greek bankers said on Tuesday. By George Georgiopoulos and Lefteris Papadimas
Greeks had withdrawn up to 800 million euros ($1 billion) a day from major banks before Sunday's vote on fears a leftist victory would mean a return to the drachma. They were now bringing back some of the money stashed at home, bankers said.
"The bleeding has stopped," said one Greek banker, who declined to be named.
One Greek bank that was losing about 30 million euros a day in the days leading up to the election, more than half of which was taken home or put in safe deposit boxes, found the trend had quickly changed course on Monday, a banker there said.
"Yesterday, we saw a reversal. We had about 15 million euros of cash brought back," the banker from the second bank said.
However, bankers indicated that private banking clients who had wired money abroad had yet to bring their funds back.
A third Greek banker said inflows of up to 10,000 euros from small savers who had stored cash at home were returning, but that the lender had yet to see larger sums - of more than 50,000 euros - being brought back.
"We didn't have any deposit outflows yesterday and we are expecting a similar picture today," the banker said.
"The election result helped."
Deposits have been flooding out of Greek banks since the sovereign debt crisis erupted in late 2009, and the tottering banking system relies for liquidity on the European Central Bank and the Greek central bank.
Greece's banks have lost 72 billion euros in deposits since the start of 2010, or about 30 percent, according to Thomson Reuters data. Five of Greece's top banks saw 37 billion euros taken out last year, including 12 billion euros from EFG Eurobank and 8-9 billion euros apiece at National Bank of Greece, Piraeus and Alpha Bank.
Eurobank said that on a like-for-like basis, stripping out the deposits of its subsidiary Polbank which was sold in 2011, its outflows were 8.7 billion euros, in line with other top Greek banks.
"We are seeing clear signs that deposits sitting outside the banking system as cash have started to return and be redeposited," an official at Eurobank told Reuters.
About 10 to 20 billion euros of the total outflow since the start of 2010 was being kept as cash in safe deposit boxes or at home, he said, citing Bank of Greece data.
Outflows from Greek banks picked up pace dramatically before last week's vote as rumours swirled that leftist SYRIZA party was on track to win. The party, which finished second in the poll, had pledged to rip up the bailout package keeping Greece afloat, prompting fears that European partners could cut off funds and push the country back to the drachma, sharply devaluing bank deposits.
Greek bankers said they were optimistic money would continue to return in the coming days as the conservative New Democracy party made progress in putting together a coalition government to steer the country away from bankruptcy.
"We've seen people bringing back cash that they had withdrawn and mostly taken home," said a banker at a mid-sized foreign-owned lender.
"We expect this trend to pick up in the coming days." DM
Photo: A Greek orthodox priest and a couple enter the Central Bank of Greece building in central Athens June 13, 2012. Greeks pulled their cash out of the banks and stocked up with food ahead of a cliffhanger election on Sunday that many fear will result in the country being forced out of the euro. Bankers said up to 800 million Euros ($1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of returning to the drachma were fanned by rumours that a radical leftist leader may win the election. REUTERS/Yannis Behrakis