The European Central Bank interest rate increases have only trickled down to Greek deposits; from June 2022-May 2023, only 10% of the ECB rate changes were passed on to Greece, against a eurozone average of 20%. The Competition Commission cites S&P’s assessment in its survey of bank deposits, finding that this delay is even more evident in time deposits.
From July 2022 to September 2023, the ECB increased the deposit facility rate (DFR) 10 times, from -0.50% to 4%. In Greece, however, the successive increases did not pass on to household time deposits at the same rate. With the DFR at 2.50%, in February 2023, the interest rates on three-month products of systemic banks were at 0.40%-0.50%. In the middle of the year, with the DFR at 3.50%, they remained in the same range. Even after the ninth increase, to 3.75%, in August 2023, the next move came from only one systemic bank. And while the ECB’s cycle of increases was now complete, the interest rate on new retail deposits with an agreed maturity up to one year in Greece was still, in mid-2024, around 1.5 percentage points below the eurozone average.
The Commission says that is particularly significant in light of the market structure. The four systemic banks held 94.07% of deposits in 2024, characterizing the sector as a “tight oligopoly.” Although the Commission does not detect a cartel or collusion between banks, it describes the conditions that limit competition intensity: High concentration, high homogeneity in basic products, strong bank brands and low depositor mobility.
The report records new movements and potential competitors – CrediaBank, Optima, cooperative banks, Viva and digital lenders – but the crucial question, it notes, is not only whether new players merge, but whether they can attract enough deposits to force the big ones to improve their offers.
The problem is also not only how many banks there are, but also how easily depositors can react. Individuals usually lack the bargaining power to demand higher interest rates, while businesses and customers with larger balances may have a stronger position.
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