Bank lending to households and consumers still in decline
Banks are still not lending to households and consumers despite billion-euro recapitalizations, new figures show.
The latest Central Bank report shows loans to households were 4pc lower on an annual basis in August.
Mortgage lending was off 2.4pc while loans for other purposes fell by 9pc year-on-year.
Household lending declined during the month of August by €443m, based on underlying transactions, following a net monthly flow of -€710m in July.
There was a fall of €242m in loans for house purchase and a decline of €127m in loans for consumption purposes.
Lending for other purposes fell by €74m.
Ireland’s debt plight has also been highlighted by new data from the Central Statistics Office this morning, according to Bloxham Stockbrokers chief economist Alan McQuaid.
At the end of June, Ireland’s quarterly investment position results showed overall stocks of foreign financial assets of €2,544bn, down €15bn from the end-March level.
The corresponding overall stocks of foreign financial liabilities of €2,679bn decreased by €35bn in the same period.
Irish residents therefore had an overall net foreign liability of €134bn at the end of the second quarter.
“The bottom line is that we are still a long way from where we want/need to be to get the domestic economy moving again,” he said.
“ The reality is that until the banking sector crisis is fully resolved and things improve on the labour market front then the supply/demand for credit will remain subdued in our view, severely hampering the recovery prospects for the economy as a whole in the process.”