Greek Banking System Shows Growth in Deposits and Corporate Credit
Recent data from the Bank of Greece revealed a significant increase in deposits within the Greek banking system, as well as a notable expansion in corporate credit. In June alone, new loans to businesses saw a rise of 3.1 billion euros, bringing the overall credit expansion rate to 10.3%.
Boost in Business Deposits
Thanks to increased disbursements from banks and a rise in tourism revenues, business deposits surged by over €3 billion in June compared to the previous month. This pushed the total deposits held by both businesses and households to €194.8 billion by the end of June.
Growth in Household and Corporate Savings
Since the beginning of the year, deposits from households and businesses have increased by a total of €5.1 billion. The majority of this growth, nearly €4 billion, can be attributed to the increase in bank balances held by businesses, jumping from €45 billion to €49 billion. Household savings also saw an increase of €1.1 billion, reaching a total of €145.8 billion by the end of June.
The Growth of Economy and Financing Programs Boost Deposits in Banks
In February, deposits in banks in the amount of €145.8 billion increased from €144.7 billion in January. This significant expansion can be attributed to the growth of the economy, driven by the increase in tourism and other factors. Additionally, it is also a result of the surge in new disbursements from banks to fund new investment projects through the Recovery Fund and other financing programs for businesses.
These new disbursements, typically rushed at the end of each quarter due to the temporary closure of banks’ balance sheets, temporarily inflate the balances of deposits held by businesses in banks. However, these funds are eventually utilized for new investments. Banks had anticipated the acceleration of financing in the second quarter, as the disbursements fell short of the signed contracts of the Recovery Fund. It is expected that these disbursements will further increase in the next two years to ensure the absorption of the resources.
These trends are supported by the figures from the Bank of Greece, indicating a positive outlook for the future. The increase in deposits in banks reflects a growing confidence in the economy and the effectiveness of the financing programs in driving investment and growth.
The Increase in Business Financing
In the month of June, the flow of business financing saw a significant increase, rising from €75.7 billion in May to €78.6 billion. This growth indicates a positive trend in the business sector, with more companies receiving the financial support they need to thrive.
The rise in business financing can be attributed to a number of factors, including increased economic activity, improved investor confidence, and government stimulus programs. As businesses continue to recover from the impact of the pandemic, access to funding is crucial for their success.
Overall, the increase in business financing in June is a promising sign for the economy. It demonstrates resilience and a willingness to support businesses in their growth and development.
