Ulster right to target consumer lending as tills get ready to ring out for Christmas

The news yesterday from Ulster Bank chief executive Jim Brown that the bank plans to do more consumer lending bodes well for retailers in the run-up to the crucial Christmas period. Brown says Ulster plans to lend more to consumers via credit cards and personal loans.

Just in time for the shopping rush. Maybe Ireland’s love affair with buying goods on the “never never” will be rekindled.

The Central Bank’s monthly banking statistics for September, also released yesterday, show Brown is right to suggest that there is now more demand for consumer credit.

Consumer lending in September grew by €79 million, which is hardly earth shattering when overall consumer credit is €11.78 billion. But it was the first positive month in a year and only the third since the end of 2009.

Ireland, according to the Central Bank's statistics, now has 1.938 million credit cards that were used to rack up €884 million of new spending in September. If you ignore each December when people buy half their Christmas presents on credit, that is the biggest monthly new spend figure since the boom era.

The national credit card bill still stands at a hefty €2.185 billion, however, so consumers should’t lose the run of themselves yet.

Other figures from the Central Statistics Office released this week show that retail sales were up almost 6 per cent in September, on an annual basis. That is now 11 successive months of annual growth, and consumer confidence is at its highest since January 2007.

The motor industry sales says car sales are well ahead of what was expected, while furniture and electronics retailers are also growing. Harvey Norman Ireland, for example, yesterday reported growth of 10 per cent in the quarter to the end of September, according to a filing by its listed Australian parent.

The impact of water charges is likely to cancel out any smattering of the feel-good factor created by the modest tax cuts in the budget. But the overall trajectory is clear: the Irish consumer is alive, and mostly well. And slowly, but surely, s/he is on the way back.