Business World

Thursday 19 April 2018

Deposits in state-guaranteed banks inch upwards

Thomas Molloy

Thomas Molloy

THERE was another small increase in the value of deposits held by the state-guaranteed banks, the Department of Finance said.

Deposits at banks propped by the State rose 0.4pc to €153bn in June from May.

"Deposits at covered banks have remained stable through June, which is a positive result in the context of significant uncertainty in Europe," it added.

The Department of Finance began publishing figures for deposits with Irish banks late last year. The figures include deposits made by British savers with the UK post office which is operated by Bank of Ireland and the UK operations of Allied Irish Banks.

AIB's UK operations accounted for 17pc of the bank's deposits at the end of last year and saw a hefty increase of €1.2bn in 2011.

The large UK deposits mean that the figure used by the department can record a rise if the euro falls against sterling.

The Department said in a statement that foreign exchange movements accounted "for some" of the growth in deposits.

Deposits at the so-called covered banks have increased by around €13bn since the low point of €140bn in June last year.

Most of the increase happened in the first half of last year; deposits have only increased by around 3.9pc since the beginning of the year.

The Government said earlier this month that deposits made with Allied Irish Banks' UK operations would not fall under the guarantee scheme from the middle of next month. AIB's UK operations held €10.2bn of deposits at the end of last year.

Bank of Ireland, which saw deposits jump €8bn last year thanks to the post office deal, has already withdrawn its British operations from the guarantee scheme.

A separate measure of deposits held by consumers and businesses in all the banks' Irish operations have previously shown declines despite the Department of Finance figures showing increases.

Irish Independent

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