Greek bank deposits by businesses and households increased by 5.5 billion euros ($7.4 billion), or 3.5 percent, in December as euro-area finance ministers approved the release of funds under the country’s aid program.
Deposits rose for a fourth month to 161.4 billion euros, from 155.9 billion euros in November, the biggest gain since December 2007, according to a statement by the Bank of Greece on its website today. Deposits declined 12.9 billion euros, or 7.4 percent, last year as the country’s continued participation in the euro area came into doubt.
In November, Greece’s coalition government approved new austerity measures to obtain aid under two bailouts from the European Union and the International Monetary Fund. That paved the way for euro-area finance ministers in December to release disbursement of loans that were frozen since June, when Greece’s program implementation was delayed by elections.
“Political and macro developments will drive deposit evolution in the coming months,” Manos Giakoumis, a research director for Euroxx Securities SA in Athens, said in an e-mailed note. The December decision “improved depositor sentiment” and “prospects look more optimistic.”
Bank lending to households and businesses fell at an annual rate of 4 percent in December compared with 4.6 percent the month before and 4.8 percent in October, the central bank said in a separate statement today.
In Cyprus, total deposits in the banking system rose to 70.2 billion euros in December from 69.9 billion euros the month before, according to a statement on the Central Bank of Cyprus’s website.