Deposits of around 19 billion euros have been returned to banks by households and businesses from 2021 to date, recording an increase of 16%, according to data from the Bank of Greece.

As pointed out in the financial bulletin of the Bank of Greece significant inflows of deposits from households have also been recorded mainly in the three years 2021-2023 while the “fatigue” recorded in the first quarter of 2024 is mainly attributed to a shift towards alternative savings options that offer returns higher than deposits.

Nevertheless in August the figures are encouraging for a return to the upward trend as bank deposits of non-financial corporations and households increased by €0.8 million and those of households also increased by almost €1.0 billion. In the same month the annual growth rate of household deposits with an agreed duration (time deposits) slowed further (to 6.3%) as the reallocation of funds from overnight deposits to time deposits took place in 2023 after the tightening of monetary policy, seems to have come to an end.

However, the data published by the Bank in its Financial Bulletin show that the net inflows of deposits from households and businesses in 2021 were 8.5 billion. euros, in 2022 5.5 billion euros and 5 billion euros in 2023, with the result that today their total has reached 146.8 billion euros, from 126.2 billion euros at the beginning of 2021.

This development primarily reflects the consolidation of depositors’ confidence in the banking system, but also in the positive outlook of the Greek economy as a whole.

In terms of grants, the picture is less encouraging. After the peak reached in September 2022 (12.3%), bank credit expansion to businesses has fallen significantly due to higher interest rates and weakening economic growth which to some extent leads to lower loan demand. However, Bank of Greece data shows that as of September 2023 the annual growth rate of business loans has recovered.

In August 2024, bank credit to businesses (based on net flows) increased by €100 million and the annual growth rate accelerated to 10.5%. However, the granting of loans to households remains subdued, mainly due to the continued decrease in housing loans.

BoE data shows that the contraction of bank loans to households continues in 2024, mainly reflecting the reduction in housing loans, although at a gradually slowing rate – consumer loans are recording small but positive growth rates as early as mid-2022

In August 2024, the rate of mortgage loan contraction remained unchanged at -2.7% and the annual growth rate of consumer loans continued to stand at 5.8%.

According to AnaCredit data, new loan disbursements to non-financial corporations in 2023 amounted to around 9 billion euros, remaining down by a third compared to 2022, in line with monetary policy tightening, but still exceeding significantly the corresponding amount of 2021 (7.0 billion euros. In the period January – August 2024, disbursements of new business loans amounted to 7.6 billion euros against 5.0 billion euros in the same period last year.