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Bank of Greece Warns About Bad Loans, Expects Rise in Deposits

Greek bank deposits are expected to rise in 2017, the Bank of Greece (BoG) said in its Financial Stability Report released on Tuesday.
In the same report, the BoG warned that despite positive prospects, the outstanding sum of non-performing loans remained at very high levels, at 45.2% at the end of March 2017.
This was due to the reduction in the overall level of loans offered, but also to the increased uncertainty created by the prolongation of negotiations on the second review of the bailout program.
The central bank, in the report, said that despite a decline in deposits in the first quarter of the year, completion of the review was expected to contribute in the reversal of the negative trend in the second half of 2017.
A rise in deposits will reflect market confidence over the improvement of macro-economic outlook, while a significant role will play a return of cash currently outside the banking system, also linked with the establishment of a climate of confidence in markets.
Credit to households was not expected to rise this year, although credit to small- and medium-sized enterprises, innovation and startups was expected to grow in cooperation with the European Investment Bank (EIB).
The central bank, however, noted that long-term loans were declining as criteria were expected to become stricter.

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