Banks continue to leak deposits

The Central Bank in Dublin: said private sector deposits dropped at an annual rate of 9.8 per cent in February

The run on deposits at Irish banks accelerated last month, according to latest money and banking statistics from the Central Bank.

The figures show private sector deposits, a key source of bank funding, dropped at an annual rate of 9.8 per cent in February compared to 8 per cent the previous month.

Household deposits fell by 6.1 per cent while corporate deposits dropped by 14.3 per cent.

There was an underlying decline of almost €1.8 billion in Irish private sector deposits in February, bringing the three-month average net flow to minus €2 billion.

Overall lending to consumers fell 5.1 per cent on an annual basis in February while mortgage lending dropped by 2.7 per cent and lending to consumers for other purposes fell by 13.7 per cent.

Lending to households declined during the month by €302 million, following a net monthly flow of minus €676 million in January.

The fall in household loans was “primarily driven” by a contraction of €212 million in lending for house purchase, according to the bank.

Overall lending to businesses fell 1.6 per cent on an annual basis, compared with a 1.4 per cent fall in January.