Greek News Economy Banking Sector to Shrink in Next Few Years

Banking Sector to Shrink in Next Few Years

Greek bank officials are expecting the local credit sector to shrink rapidly in 2012 and the following years, as daily Kathimerini reports today. They estimate that major lenders will merge to create two or three big banks, while most of the small ones will either be incorporated into bigger schemes or cease to operate.
In the last few weeks Proton Bank and TBank have already had their status changed, with the former coming under the control of the Credit Stability Fund, while most of the latter’s assets have been passed on to Hellenic Postbank.
Credit sector officials told Kathimerini it is inevitable the sector will shrink as its size is entirely dependent on the economy. “The structure of the banking system remains to a great extent orientated toward the situation in the market, as it did in 2007 when the credit expansion rate was in the double digits and the expectations for the course of the economy were great,” they said.
Business plans for most banks in the new year include reductions in branch networks, cutting staff and the sale of assets and subsidiaries abroad.
The prospects of employment in the sector are not positive, either: European Central Bank data showed that at the end of 2010, Greek banks employed 63,408 people, down from 66,163 in 2008.
Bank officials expect the figure to plummet in the next couple of years, amounting to 13,000 fewer jobs by 2013.
(source: ANSA)

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