Greek Bank Deposit Outflows Said to Have Slowed After Elections

Greek Bank Deposit Outflows Said to Have Slowed After Elections
A sign outside the offices of the National Bank of Greece SA in Athens, on June 14, 2012. Photographer: Chris Ratcliffe/Bloomberg

Greek deposit withdrawals slowed after an election victory by the pro-bailout New Democracy party eased concern the nation will abandon the euro, three people familiar with situation said.

Deposits were little changed at one of the nation’s top four banks yesterday, according to one banker, who asked not to be identified because the information is private. Daily withdrawals in Greece peaked at more than 700 million euros ($880 million) last week, the bankers said. An official for the Bank of Greece, the Athens-based central bank, declined to comment.

Greeks have withdrawn cash on concern a possible victory by anti-bailout parties would precipitate an exit from the euro, eroding the value of their savings. New Democracy won enough seats on June 17 to beat the anti-bailout party Syriza and potentially put together a majority coalition with third-placed Pasok. Antonis Samaras, the New Democracy leader, is making a second effort in six weeks to form a government that will keep aid flowing from the European Union and International Monetary Fund.

“Fear about what might have happened to capital under a Syriza government was of concern to depositors,” said Alexander Kyrtsis, a European bank specialist at UBS AG in London. “Failure to form a coalition government, as well as concern about Greece’s cash position, could be other causes for alarm.”

Stocks Rebound

Greek stocks rebounded to a one-month high yesterday as National Bank of Greece SA, the nation’s largest bank, gained 11 percent and EFG Eurobank Ergasias SA jumped 15 percent.

Greek lenders have been paring back activities after depositors pulled about 72 billion euros from their accounts since the nation triggered a region-wide sovereign-debt crisis in October 2009, and after writing down their government bond holdings. Deposits rose in April to about 160 billion euros, the most recent figures available from the central bank show.

Outflows reached as much as 6 billion euros in May, Athens-based Kathimerini reported June 9, without saying where it got the information. While lenders have access to European Central Bank funding, an exit from the euro would cut them off.

National Bank, EFG Eurobank, Alpha Bank SA and Piraeus Bank SA, Greece’s four biggest banks, in May received 18 billion euros as part of a recapitalization plan that will be completed by the next government. Banks must finish a 50 billion-euro capital boost by September.

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