Irish banks now less dependent on aid from ECB
BANKS in Ireland are now less dependent on emergency aid from the European and Irish central banks than at any time since the middle of 2010.
Banks here owed the European Central Bank (ECB) €70.9bn at the end of last year, the Central Bank said in a statement.
That was down from €75.7bn at the end of November.
A further €40.4bn in emergency loans is owed to the Irish Central Bank, mainly by IBRC, the former Anglo Irish Bank.
The total of outstanding emergency support is now €111.3bn, compared to an all- time high of €187bn just under two years ago.
The figures include ECB loans to Irish branches of foreign banks but are mainly made up of loans to the main domestic lenders.
The banks must cut their reliance on the emergency loans under the terms of the bailout.
So far, the ECB loans have mainly been repaid after banks sold off assets, particularly business and loan portfolios abroad.
The cash raised when Bank of Ireland and AIB were able to borrow on the bond markets in December was also used to bring down the overall figures, and so further normalise banks' funding profiles.
Weaning themselves off the ECB is a challenge for banks, not only because loans have to be repaid, but also because the ECB lends on terms so generous they cannot be matched in the "real world," putting pressure on already tight margins.