New figures show lending to Irish households is still falling

Total lending to households decreased by 3.8 per cent in March, according to the Central Bank

Deposits from Irish households fell by €105 million in March, new figures show

Deposits from Irish households fell by €105 million in March, new figures show

Wed, Apr 30, 2014, 12:25

Lending to Irish households continued to decline in March, according to new figures from the Central Bank.

Total lending to households decreased by 3.8 per cent in March. Loans for mortgages, which account for 78 per cent of total household loans, declined at an annual rate of 3.1 per cent while lending for consumption and other purposes fell by 6.2 per cent over the year.

The latest data show household loan repayments exceeded drawdowns by €85 million during March, following a net monthly decrease of €402 million in loans in February. Loans for consumption purposes showed the most substantial decline, falling by €48 million over the month.

Lending to businesses was also lower during the month with loan repayments exceeding drawdowns by €520 million in March. This represents the sixteenth consecutive monthly decline in loans.

When it comes to deposits, the statistics indicate that Irish people are saving less, a trend noticed earlier this year. On an annual basis, deposits from Irish households fell by €105 million.

Credit institutions’ borrowings from the Central Bank as part of the Eurosystem monetary policy operations fell by €3.1billion in March, leaving the outstanding stock of these borrowings at €33.5billion.

Separately, new figures published by Eurostat, the statistical office of the European Union, show that the household saving rate in the euro zone was unchanged in the fourth quarter of 2013 at 13 per cent. The saving rate for the EU28 fell slightly, from 10.8 per cent in the third quarter to 10.6 per cent in the last quarter of the year.

The household investment rate meanwhile was 8.4 per cent during the fourth quarter, as against 8.5 per cent in the preceding three months. In the EU28, the household investment rate was 7.9 per cent, compared to 7.8 per cent in the third quarter of 2013.

In the euro area, in nominal terms, household income rose by 0.4 per cent in the fourth quarter, with consumption also up 0.4 per cent and investment (gross fixed capital formation, mostly in dwellings) fell by 0.2 per cent.