Friday 24 March 2017

Short-term deposits to fore as cash accounts halve since 2008

Joe Brennan

A breakdown of Anglo's all-important funding base shows that only €34m of its customer deposits mature after five years.

The amount lodged in customer accounts at the nationalised bank has fallen by €21bn to €27.5bn since the end of September 2008 -- the day the state banking guarantee was introduced.

The largest concentration of Anglo's deposit maturities -- at €10.8bn -- ranges in the three months to one-year timeframe.

Part of the decline is attributed to Irish Life & Permanent's controversial €7.3bn of deposits with the then-faltering bank being withdrawn in October 2008.

Borrowings from central banks has surged to €23.7bn by the end of December, from €7.6bn in September 2008, as a result of the decrease in customer and market funding.

"The decrease in customer and market balances has been driven by marketwide risk aversion towards the banking sector in general, bank-specific ratings actions and reputational issues," Anglo said in report.

On a more positive note, the bank said it issued €7.4bn of government-guaranteed bonds during the course of the 15 months to the end of December, including €5.4bn in the second half of last year.

"This issuance more than offset the impact of maturing term deals," the bank said.

Irish Independent

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