Total savings in the banking system rose mainly on a €285.3m increase in the deposits held by domestic non-financial corporations, to €8.5bn, the highest since March 2013, and a €225.9m rise in those held by domestic other financial corporations, to €3.1bn, the bank supervisor said in a statement on Wednesday.

Total deposits held by domestic bank customers rose by €398.1m, to €39.8bn, again the highest since the bail-in, offsetting outflows by residents of other euro area members and third countries who withdrew €28.9m, to €3.2bn, and €168m, to €7.9bn respectively.

Deposits held by the general government fell in May by €174.2m, to below €2.8bn, after rising in April by €2.5bn, when the central government decided to support the Cooperative Bank to prevent a further outflow while the procedure for the sale of its operations was ongoing. Finance Minister Harris Georgiades said on June 18, that the co-op saw its customers withdraw €2bn in the first three months of 2018 on fears it was under capitalised.

The reduction in credit continued for the third month in a row and reflects a general deleveraging trend that began in September 2012 when total loans peaked at €72.7bn, the central bank said. The drop was mainly on a €90.4m reduction in credit extended to other financial intermediaries, which dropped to €7.8bn while that of households fell by €46m, to €20.6bn, the lowest since September 2008.

In May, banks extended €60.2m in fresh loans to non-financial sector companies whose total credit rose to €19.5bn, the central bank said.

Source: Cyprus Mail