Wednesday 22 November 2017

Irish bank deposits rise despite Cyprus fears

Colm Kelpie

Colm Kelpie

DEPOSITS held by Irish banks covered by the state guarantee rose fractionally last month, despite the fallout from the controversial Cypriot bailout.

Allied Irish Banks Group, Permanent TSB and Bank of Ireland saw deposits increase by 0.6pc during the month to €155.6bn.

This was mainly due to strong retail deposits.

The guarantee on deposits above €100,000 expired at the end of March. The Department of Finance said its end had no impact on deposits.

Wealthy depositors and senior bondholders took a hit under the the Cypriot bailout, sparking fears that money could be pulled out of banks elsewhere in the eurozone.

However, the figures released by the Department of Finance confirm the bailout had no impact here.

While headline deposits increased during March, the weakening of sterling against the euro continues to affect deposit values. About 53pc of the movement in UK deposit values since December is attributable to unfavourable exchange movements.

Meanwhile, the reliance on European Central Bank (ECB) funding by the banks dropped 10pc during the month. Year-on-year borrowing from the ECB was down about €25.8bn, or 39pc, to €39.6bn last month.

"The steady decline in reliance on ECB funding reflects the continued strengthening of the banking system," the Department of Finance said.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business