Further decline in household lending
Lending to households continues to decline, despite a marginal increase in June, according to new statistics from the Central Bank. The data also shows a moderation in dependence on European funding from Irish banks.
In the month of June, lending to households increased by €55 million, up from a monthly flow of minus €264 million in May, according to the Central Bank's Money and Banking Statistics for June. However on an annual basis, lending fell by 3.7 per cent, with mortgage lending down by 2.2 per cent and lending for consumption and other purposes down by 7.9 per cent.
Credit for companies also declined, down by 2.9 per cent on an annual basis, up from the figure of 2.1 per cent reported in May. Loans to companies fell by €399 million during June, following a decrease of €338 million in May.
The statistics also show a moderation in the dependence of Irish based banks on European Central Bank funds. In June, borrowings by Irish institutions from the Eurosystem increased by €248 million, down from the €2 billion reported in May. The total outstanding borrowings for Irish banks stood at €88.3 billion as of the end of June, with domestic institutions accounting for €75.8 billion of this.
Irish resident private-sector deposits were down by 2.5 per cent on an annual basis at the end of June, with deposits from households 0.4 per cent lower and deposits from companies down by 1.1 per cent.
Non-resident private sector deposits were 6.5 per cent lower on an annual basis at the end of June, reflecting developments in IFSC based banks.