Business Irish

Thursday 8 December 2016

Private sector deposits fall €4bn after 'intra-group movements'

FINANCE

Published 30/07/2011 | 05:00

IRELAND's bailed-out banks suffered a surprise €4bn fall in private sector deposits in June, marking their biggest outflow since last October.

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The revelations in Central Bank data follow repeated claims that deposit levels had "stabilised" after the March stress tests triggered a €24bn recapitalisation of Ireland's banking sector.

The Central Bank said that €2.5bn of the fall in private sector deposits across both foreign and Irish-owned banks stemmed from "movements in intra-group deposits".

A spokeswoman last night declined to break out how much of that activity involved Ireland's six bailed-out banks, making it impossible to work out 'underlying' deposit fall.

Drop

Even if the entire €2.5bn was linked to the six covered banks, the underlying fall would have been €1.5bn, the worst drop since January.

Private sector deposits across Ireland's entire banking sector, including foreign-owned banks, fell by an underlying €1.8bn in June, suggesting the drop in deposits was largely contained to bailed-out banks.

The slump left private sector deposits at just €103.5bn in the six 'covered' institutions, the lowest level since May 2006.

General government deposits remained artificially high at €21.1bn, reflecting about €19bn of deposits to be converted into this week's bank bailout.

More encouragingly, deposits from financial firms rose almost €3.5bn to €85.3bn. The 'rest of world' deposits in the six banks were down another €4.9bn, while deposits from the euro area fell another €100m, bringing them down to just €2.8bn.

Irish Independent

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