Wednesday 17 January 2018

Loans still falling as banks lose deposits


Laura Noonan

Laura Noonan

LOANS to Irish households and businesses fell marginally again in May, while deposit levels in the six bailed-out banks contracted once more, the Central Bank's latest money and banking statistics show.

The data for all banks trading in Ireland show that loans to households were down €449m in May, bringing the annual reduction rate to 4.8pc.

Mortgage loans were the biggest contributor to the fall in household borrowing, as lending for house purchases dipped by €262m in May.

Lending for general "consumption" fell just €156m in May -- a sharp improvement on the €341m fall in April.

The latest data also show lending to companies continued to contract, with borrowings by "non-financial corporations" down 2.6pc in the year to the end of May.

On the deposit side, the six bailed-out banks continued to shed deposits in May but the Central Bank said the latest fall was "largely" attributable to movements involving the banks' own subsidiaries.

The detailed data show that while deposits in the bailed-out banks fell by more than €24.5bn in May -- or 10pc -- the funds held by the private sector fell by just 0.6pc or less than €800m.

The data also shows that the bailed-out banks' dependence on last-resort liquidity from the European Central Bank fell €3.3bn in May, to come in at just under €70.1bn.

The banks are also being supported by about €50bn of "exceptional liquidity assistance" channelled through the Central Bank of Ireland and guaranteed by the State.

Irish Independent

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