Cyprus Mail
Business Cyprus

Outflow of deposits slows

ALTHOUGH the seepage of deposits continues, the outflow has slowed down to a crawl compared to the start of the year, data released by the Central Bank of Cyprus (CBC) show.

In October total deposits of non Monetary and Financial Institutions (MFIs) in banks stood at €47.312bn, a drop of €163m from September.

By contrast, deposits from August to September had nosedived by €924m. The largest decrease in deposits (minus €3.7bn) took place in March – the month the Eurogroup decided to wind down the island’s then second-largest lender Laiki and impose a haircut on uninsured savings in Laiki and Bank of Cyprus.

From March to October, deposits dropped by a whopping €16.4bn. And from October 2012 to October 2013, total deposits shrank by 22.7 per cent.

A breakdown of the data for October 2013 shows that, despite the overall slowing down of outflows, deposits held by domestic residents fell by €461.8m and deposits held by other euro-area residents by €107.8m. This decline was however offset by an increase by €406.6m in deposits held by residents of the rest of the world.

Of the total deposits in October, €32.5bn belonged to domestic residents, €2.682bn to other euro-area residents, and €12.116bn to rest-of-the-world residents.

Households held the bulk of deposits with €27.967bn, followed by non-financial corporations (€11.1bn), other financial intermediaries (€5.401bn), insurance corporations and pension funds (€2.420.3bn) and the general government (€355.2m).

In March of this year deposits of households had amounted to €32.765bn.

Total outstanding loans meanwhile fell to €63.303bn from the €64.075bn recorded in September, a sign that banks continue hold a firm grip on credit.

The total credit to non-banks in the system was 12.1 per cent lower compared to the same month (October) last year.

 

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