Greek banks' ECB funding rises in December, ELA down

European Central Bank funding to Greek lenders rose in December after the ECB started accepting the debt-laden country's debt as collateral again at its funding operations, Greek central bank figures showed on Monday.

Renewed access to ECB funds is a boon to Greece's cash-strapped banks because it lowers their funding costs by about 2 percentage points, compared with the emergency lending from the Bank of Greece (ELA) that they had relied on since July.

The ECB had stopped accepting Greek sovereign debt as collateral in July pending the completion of a review of Athens' progress on its EU/IMF bailout program. The ban was lifted last month after Athens agreed a new reform and austerity program with its international lenders.

Lending from the European Central Bank to Greek lenders rose to 19.35 billion euros ($26 billion) at the end of December from 5.61 billion a month earlier, the Bank of Greece said. ELA funding fell 17 percent over the same period to 101.85 billion.

ELA lending, charged at about 3 percent according to Greek banking sources, helped triple the Bank of Greece's net income to 318.6 million euros in 2012 from 96.6 million euros the previous year, according to figures released by the central bank on Monday.

The Bank of Greece will return 305.3 million euros of this to the Greek state, including gains it has made from holding Greek bonds that were excluded from a writedown of their value imposed on the country's private-sector creditors in March. ($1 = 0.7524 euros)

(Reporting by George Georgiopoulos and Harry Papachristou; Editing by Ruth Pitchford)