Bank lending levels fall again

Wed, Feb 29, 2012, 00:00

The level of lending to consumers and businesses fell again in January, the Central Bank said today.

Irish resident private sector bank deposits were also down, registering a drop of €482 million, 7 per cent lower on a annual basis at the end of January.

Deposits from businesses outside the financial sector fell by almost €1.1 billion during the month. Household deposits fell by €57 million.

The Central Bank report Money and Banking Statistics: January 2012 says lending to households continued to fall in January, down almost 4 per cent year on year.

Lending for house purchase was 2.4 per cent lower on an annual basis in January 2012, while lending for consumption and other purposes declined by 8.2 per cent over the same period.

Lending to households declined by €690 million during the month of January, driven by a decline in loans for consumption purposes of €394 million, while loans for house purchase and loans for other purposes also decreased by €216 million and €80 million, respectively.

Lending to businesses outside the financial sector declined 2.2 per cent in the year ending January 2012 with loans decreasing by €548 million during January, following a fall of €665 million in December.

The monthly net flow of loans to those businesses averaged minus €391 million in the three months ending January 2012, compared with an average of minus €359 million in the three-month period up to end-December 2011.

Credit institutions’ borrowings from the Central Bank as part of Eurosystem monetary policy operations fell by €13.5 billion in January 2012, due to a decline in IFSC banks’ recourse to refinancing operations.

The outstanding stock of borrowings from the Eurosystem by Irish resident credit institutions amounted to €94.9 billion at end-January. Domestic market credit institutions accounted for €71.3 billion of this