Greek credit contraction slightly decelerated in September

Latest BoG data show that credit contraction in the Greek market slightly decelerated to 4.5% y-o-y in September from 4.8% y-o-y in August, with balances reaching €231.8bn corresponding to 114.3% of GDP. Loan balances eased 0.5% m-o-m with net flow retaining its downward trend for third consecutive month on net deductions of €0.47bn in September from €1.05bn in August and €1.43bn in July.

Individuals & private non-profit institutions’ lending growth remained on negative grounds, with balances reaching €107.5bn, down 0.5% m-o-m and 4.2% y-o-y (Aug: -4.2%). Monthly net deductions continued unabated for thirtieth consecutive month at €0.31bn in September from 0.35bn in August and €0.46bn in July.

Housing loan balances contracted 0.5% m-o-m and 3.7% y-o-y (Aug: -3.6%) to €75.1bn. Deductions persisted for twenty-sixth month in a row at €0.20bn in September from €0.27bn in August and €0.29bn in July.

Consumer credit slipped 0.5% m-o-m and 5.3% y-o-y (Aug: -5.3%) to €30.8bn. Monthly net deductions remained almost flat m-o-m at €0.11bn.

Corporate lending outstanding balances retreated 0.6% m-o-m and 4.9% y-o-y (Aug: -5.3%) to €110.3bn, Monthly net flow remained negative with deductions easing to €0.16bn in September from €0.66bn in August and €0.94bn in July.

Loans to sole proprietors stood at €14.0bn, flat m-o-m and down 4.1% y-o-y (Aug: -4.7%). Monthly flow remained at extremely low levels with marginal inflows of €2m from outflows of €42m in August and €33m in July.

Lending constraints of Greek banks and tight liquidity conditions coupled with the prevailing macro uncertainty and consumers’ reluctance to involve in any lending activity are expected to retain, in my view, lending growth at negative levels in the coming months, on continuing outflows in the household lending sector, while corporate lending flow volatility is expected to be maintained.

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