Greek Deposits Rose in December After Three-Month Decline

Greek bank deposits by businesses and households rose in December for the first time since August as the country’s political outlook stabilized with the formation of an interim government under Prime Minister Lucas Papademos.

Deposits increased to 174.2 billion euros ($228 billion) from 172.9 billion euros the previous month, a rise of 0.75 percent, according to a statement by the Bank of Greece on its website today. Deposits declined 35.4 billion euros, or 17 percent, in 2011.

Deposits shrank 8.3 percent in the three months to November as the country fell short of targets under a European Union and International Monetary Fund fiscal program, leading to agreement on a second Greek financing package at an EU summit on Oct. 26. Papademos’s appointment on Nov. 11 stemmed the deposit outflow after his predecessor, George Papandreou, roiled markets by calling a referendum on the plan.

“The outlook remains fragile and macro and political developments, as well as the depth of recession, will drive deposit evolution in the coming months,” Euroxx Securities SA (EX) research director Manos Giakoumis said in an e-mailed note.

Greek bank lending to households and businesses fell an annual 3.2 percent in December, according to a separate statement from the central bank today.

To contact the reporter on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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