Tags: Crédit | Agricole | Greece | bank

WSJ: French Bank Crédit Agricole Making Plans to Pull Out of Greece

Thursday, 14 Jun 2012 08:54 AM


French financial institution Crédit Agricole may pull out of Greece in anticipation of a Greek exit from the eurozone.

Crédit Agricole, the largest foreign bank in Greece, is one of many companies making contingency plans to leave the debt-ridden country should it decide to default on its debts and pull out of the eurozone.

While several years old, the European debt crisis has yet to see a major run on the euro or on banks in countries such as Greece, as investors can shift their assets elsewhere in the currency zone.

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However, Greeks will hold elections on Sunday, and concerns persist that voters could thrust enough leftwing politicians into power who would reject austerity measures imposed on the country in exchange for bailout money.

And end to rescue funding could prompt a Greek exit from the euro, and fears of such is already sending Greeks rushing to yank their money out of the banking system altogether.

According to The Wall Street Journal, Crédit Agricole is mulling two options, consolidating its Greek subsidiary Emporiki into a larger conglomerate of Greek banks, which would dilute its stake to 10 percent or just let Emporiki fail.

"Politically, if Greece were to exit the eurozone, Crédit Agricole would have no obligation to stay," a source with knowledge on the matter tells the Journal.

Greeks continue to yank their money out of their banks as the elections approach.

Combined daily deposit outflows from large financial institutions in Greece have reached 500 million euros to 800 million euros ($629 million to $1 billion) over the past few days, Reuters reports.

Deposit outflows from smaller and medium-sized banks is running at 10 million euros to 30 million euros ($12.6 million to $37.7 million).

"This includes cash withdrawals, wire transfers and investments into money market funds, German Bunds, U.S. Treasurys and EIB bonds," a banker, speaking on condition of anonymity, tells Reuters.

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