Greek loan expansion remained on negative grounds in June

According to BoG, total credit eased 0.8% m-o-m and 4.3% y-o-y in June (May: -4.5% y-o-y) reaching €240.2bn. Net flow rebounded with net additions reaching €851m in June, from net deductions of €940m in May, entirely attributed to corporate lending inflows of €1,067m, while household net flow remained on negative grounds (-€265m) for twenty-seventh consecutive month.

More specifically, corporate lending outstanding balances slipped 1.4% m-o-m and 4.1% y-o-y to €114.6bn. Monthly net flow turned positive with net additions at €1,067m in June from net deductions of €544m in May. Loans to sole proprietors stood at €15.0bn, up 0.2% m-o-m, yet down 5.4% y-o-y. Monthly flow remained below the €100m mark, with inflows at €49m in June from outflows of €25m in May.

Individuals & private non-profit institutions’ lending growth retained its downward trend, with balances reaching €110.6bn, down 0.2% m-o-m and 4.4% y-o-y. Monthly net deductions continued unabated for twenty-seventh consecutive month at €265m in June from €371m in May. Outstanding balances in housing loans contracted 0.2% m-o-m and 3.5% y-o-y to €77.0bn. Deductions continued for twenty-third month in a row at €109m in June from €262m in May. Consumer credit slipped 0.5% m-o-m and 6.3% y-o-y to €31.7bn. Monthly net deductions increased to €162m in June from €128m in May.

Given the lending constraints of Greek banks and tight liquidity conditions along with the prevailing macro uncertainty and consumers’ reluctance to involve in any lending activity, I retain my view for lending growth at negative levels, hovering at 4-5% in the coming months, on continuing outflows in the household lending sector, while corporate lending flow volatility is expected to continue.

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