GREECE: Bank deposits up in November, credit shrinks

Bank of Greece figures showed deposits increased for the third consecutive month – by 640 million euros to 155.89 billion euros ($206.3 billion) at the end of November from 155.25 billion euros in October.

Banks lost about a third of their deposits since the country's debt crisis erupted in late 2009, partly due to capital flight on fears of a euro zone exit.

The shrinking deposit base added to strains on Greek lenders, which lost access to international funding markets and have come to depend on central bank funding for their liquidity.

Deposits have risen over the past few months after confidence increased that Greece's European partners would continue bankrolling the country to keep it in the euro zone.

Central bank data also showed that bank lending to Greece's private sector contracted further in November, as the country's deep economic slump sapped demand for loans.

The Bank of Greece said credit shrank 4.6% on an annual basis in November, with the pace of decline easing slightly from October's 4.8%.

Years of recession and tight credit conditions are eating into the borrowing that once fuelled consumption and economic expansion in Greece, which is struggling to emerge from a debt crisis that brought it to the brink of bankruptcy.

The economy is projected to contract for a sixth consecutive year in 2013 with gross domestic product (GDP) projected to shrink by 4.5%.