Significant deposit inflows of €5.7bn in December

Latest BoG data show positive deposit flow for fourth consecutive month with significant inflows of €5.66bn in the Greek market in December (the highest monthly figure since December ’08) from €0.67bn in November and €1.0bn in October. December net additions are mainly attributed to time and sight inflows of €2.37bn and €2.18bn respectively, while savings recorded inflows of €1.11bn for the first time since April ’12. The material rebound in all deposit segments reflects improved depositor sentiment mainly courtesy of December Eurogroup decisions eliminating Grexit scenarios and providing a deep breath in the country’s struggling economy.

More specifically, time deposits rose 2.3% m-o-m and slipped 2.7% y-o-y to €98.3bn. Monthly flow remained positive for sixth consecutive month with net additions almost doubling to €2.37bn in December from €1.30bn in November. Savings increased 2.5% m-o-m and retreated 16.2% y-o-y to €44.8bn with inflows of €1.11bn in December from outflows of €0.81bn in November. Sight deposits rose 13.5% m-o-m and slipped 7.4% y-o-y to €18.1bn. Monthly flow remained positive for second month in a row with inflows rising to €2.18bn in December from €0.17bn in November.

Overall, deposits [private sector] rose 3.5% m-o-m and eased 7.4% y-o-y to €161.4bn in December, corresponding to 83.2% of GDP from 83.5% at YE’11. Furthermore, total deposits [euro and non-euro area residents] also increased by €8.75bn or 4.8% m-o-m to €191.1bn, also reflecting general government inflows of €3.35bn.

It is also noteworthy that deposit inflows amounted to €11.29bn in H2’12 (i.e. post elections and coalition government formation) partially reversing the substantial outflows of €24.14bn recorded in H1’12. As a result, 2012 outflows stood at €12.84bn materially lower compared to the €35.65bn and €28.37bn recorded in 2011 and 2010 respectively.

The bulk of 2012 outflows stems from savings (€8.6bn) primarily reflecting the ongoing recession in the Greek market and its consequent impact on household savings. In particular, according to the latest official data released by ELSTAT, household disposable income retreated by €4bn or 10.6% y-o-y in Q3’12 (from -13.6% in Q2’12) to €33.2bn, reflecting a drop in employee compensation by 11.3% and social benefits by 10.2% and an increase in taxes by 17.7%.

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