Bank lending remains stalled
Credit provision to businesses hits new post-crash low
New figures from the Central Bank point to continued weakness in the banking sector and very limited progress in improving credit provision for the economy.
Bank lending to households rose slightly in June but remains close to post-crash lows. Companies are faring even less well, with their total borrowings from banks falling in June to reach a new post-2008 nadir.
The figures, published by the Central Bank, point to continued weakness in the banking sector and very limited progress in improving credit provision for the economy.
The total stock of mortgage lending stood at €83.6 billion in June, up fractionally on May. Although it was one of the few month-on-month increases in total mortgage loans outstanding, the trend remains flat at best. In 2008, Irish residents collectively owed the banks more than €127 billion in mortgage loans.
Lending for consumer purchases recorded an even rarer monthly increase in June, but the trend remains downward.
Total outstanding stock of bank lending for consumer purchases stood at €13.4 billion in June, down by more than half from the peak in 2008.
Bank lending to businesses fell yet again in June, reaching a new post crash low of €82.2 billion. It has also fallen by more than half from peak, although much of the decline is accounted for by the removal of property developers’ loans from banks balance sheets and their transfer to Nama.
In the case of consumers, the reduction in total lending has been accounted for mostly by very limited new debt issuance and the steady paying down of outstanding debts.