Greek credit contraction slightly accelerated in October

According to latest BoG data, credit contraction in the Greek market slightly accelerated to 4.8% y-o-y in October from 4.5% in September, with balances reaching €230.7bn corresponding to 117.4% of GDP. Loan balances eased 0.5% m-o-m with net flow retaining its downward trend for fourth consecutive month on net deductions of €1.04bn in October from €0.47bn in September and €1.05bn in August.

Individuals & private non-profit institutions’ lending growth remained on negative grounds, with balances reaching €107.2bn, down 0.3% m-o-m and 4.1% y-o-y (Sep: -4.2%). Monthly net deductions continued unabated for thirty-first consecutive month at €0.33bn in October almost stable over the past three months.

Housing loan balances contracted 0.3% m-o-m and 3.7% y-o-y (at the same pace with the previous month) to €74.9bn. Deductions persisted for twenty-seventh month in a row at €0.21bn in September flat m-o-m.

Consumer credit slipped 0.4% m-o-m and 5.2% y-o-y to €30.8bn (Sep: -5.3%). Monthly net deductions remained stable m-o-m at €0.12bn.

Corporate lending outstanding balances retreated 0.7% m-o-m and 5.6% y-o-y (Sep: -4.9%) to €109.6bn, Monthly net flow remained negative with deductions increasing to €0.61bn in October from €0.16bn in September.

Loans to sole proprietors stood at €13.9bn, down 0.7% m-o-m and 3.6% y-o-y (Sep: -4.1%). Monthly outflows stood at €0.1bn from almost zero in the previous month.

Lending constraints of Greek banks and tight liquidity conditions coupled with the prevailing recession and consumers’ reluctance to involve in any lending activity are the key reasons for negative credit expansion, on continued outflows in the household lending sector and negative – yet volatile – corporate lending flow.

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