Piraeus Bank

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Clio
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Joined: Thu Nov 15, 2007 4:54 pm

Piraeus Bank

Postby Clio » Wed Feb 14, 2018 9:59 pm

I learned today that Piraeus Bank are about to close a number of smaller branches, including the one in Spili, Rethymno, which has a huge catchment area, and which will cease trading from the beginning of next month. (Other members might think it a good idea to make enquiries about their own branches).

In a largely rural society, it’s bad news even for those local people who have learned to use internet banking and who have their own transport: in future they will have to travel to the big towns to make deposits, arrange insurances, and do all the various other bits of banking business which have been catered for locally until now.

But for the older people in the dozens of small communities between north and south coasts, who can’t manage to use an ATM never mind internet banking – people who have always travelled once or twice a month to the head village to withdraw cash using their bank books – it is devastating.

And of course there will be depressant knock-on effects – for the weekly market, the cafeneia, the supermarkets who have earned a little from the regular visits of the people from the feeder villages.

I’m assuming the closures are to do with the dodgy state of the Greek banking sector and/or Greece’s galloping attempt to cure its economic ills with electronification. The expansion of the e-business world, with its enormous implications for labour markets, is something for of which the west is at least aware, and to which industries and economists are addressing themselves.

But it seems to me that here it’s about the usual crisis mismanagement. Greece is trying to impose 21st century systems in a hurry, without planning, without consideration of the social context and the local implications in a country where internet penetration is still almost the lowest of all the EU countries.

(http://www.internetworldstats.com/stats9.htm)

Kamisiana
Posts: 47
Joined: Tue Jul 25, 2017 4:06 pm

Re: Piraeus Bank

Postby Kamisiana » Thu Feb 15, 2018 10:00 am

Yes Clio that just about sums Greece up, and with the aid of the EU hitting with a big stick every day :cry:

Kilkis
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Location: Near Chania

Re: Piraeus Bank

Postby Kilkis » Thu Feb 15, 2018 3:00 pm

I think that there are a lot of factors at play here. Certainly the government has pushed people to use card payments and electronic transfers far more than they used to, partly through capital controls, i.e. you simply can't access cash, and partly by linking the rebate on income tax, equivalent to a tax free threshold, to the amount spent electronically.

More companies now accept card payments than ever used to and online purchases are increasing. For example e-shop, a major online retailer for electrical and electronic products, has recently made paying with a card much easier. Previously if you wanted to pay with a card the web site was not secure and you had to get the card validated by faxing a photocopy of the card and your passport. I always paid cash. Now they are using a third-party payment system that is secure and does not need validation. I now pay by card. Increasing electronic payment means reduced branch activity making branches unproductive.

All Greek banks are insolvent in the extreme. Around 50 % of their loan book is classed as non-performing, i.e. customers are not servicing their loans. This compares to about 0.9 % in the UK. They are being pushed by the EU to reduce this but can only do so by selling the loans to a third party at very low rates and putting the loss on the books. If they don't reduce it they are forced to increase their capital ratio and exactly who is going to fund that? They are damned if they do and damned if they don't. Reducing costs by reducing branches doesn't really help when it is such an extreme problem. If a bank was making losses because its normal expenditure was a few percent higher than its revenues then reducing costs by closing the least productive branches might provide a solution. When it is completely bankrupt it doesn't really help.

Branch closures in the UK are also an issue especially in rural areas. Almost every week the leader of the SNP in the Commons asks the PM why she doesn't force RBS to stop closing branches since the government owns 80 % of it. The constant reply is that it is a business decision. At least in the UK you can use the ATM of any bank without incurring charges while in Greece you get charged if you use the ATM of another bank. I think banks in the UK have agreed to not close the last branch in an area but sometimes that simply means the post office since they offer basic banking services.

Another issue in Greece is the difficulty in opening an account with another bank. Greeks started to open multiple accounts to get round capital controls so the government made opening a new account extremely difficult. This means that if the local branch of your bank closes but there is a branch of another bank nearby you cannot simply switch accounts to the other bank. Perhaps the government should consider relaxing the control at least where there is a valid reason.

Warwick

filippos
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Re: Piraeus Bank

Postby filippos » Thu Feb 15, 2018 9:25 pm

I read something (where I don't remember) that banks in the UK are closing unproductive branches - almost exclusively in rural areas - and not even leaving an ATM which makes it very difficult for anyone without transport or computer, especially in any of the numerous places lacking public transport. Even with a computer you can't obtain cash.

Sinkingslowly
Posts: 24
Joined: Sat May 06, 2017 6:48 pm

Re: Piraeus Bank

Postby Sinkingslowly » Thu Feb 15, 2018 9:42 pm

Kilkis wrote:
Branch closures in the UK are also an issue especially in rural areas. .

Warwick


Not just in rural areas, the town of Glastonbury now doesn't have a single branch of any bank.
Businesses have to drive miles to deposit cash.

Kilkis
Posts: 9303
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: Piraeus Bank

Postby Kilkis » Thu Feb 15, 2018 9:53 pm

The sort of areas that are left without banking facilities in the UK are often the same areas that have little or no broadband coverage so you are screwed both ways. It is probably the same or worse here. I know people who live within 10 km of Chania who can't stream video or even struggle to get broadband at all because their connection is so poor. Hardly the back of beyond. I was told that DEFRA introduced a policy a few years ago that all farming subsidy applications had to be submitted online and then withdrew it because 90 % of farms didn't have adequate internet access to be able to fill in the online forms.

I accept that banks are commercial businesses that are run to make a profit BUT it is impossible to live today without at least basic banking services. I suggest that the government makes maintaining provision for every citizen a condition of being granted a banking licence.

Warwick

PS Governments around the world don't want you to have access to cash. They have raided every source of money possible except savings. If they can abolish cash then they can introduce negative interest rates and raid that as well. This is not conspiracy theory. There are Bank of England reports and others in all the developed countries proposing exactly that.

filippos
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Re: Piraeus Bank

Postby filippos » Fri Feb 16, 2018 12:14 am

W. I assume you've been keeping up with Jim Rickards and 'Ice Nine'.

Kilkis
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Location: Near Chania

Re: Piraeus Bank

Postby Kilkis » Fri Feb 16, 2018 12:31 am

Oh Yes!

Warwick


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