Growth in deposits moderates in May as pandemic measures ease

Household deposits climb by €587m to €131.5bn

Irish households saw their deposits rise by €587 million to €131.5 billion during May, compared with an increase of €1.5 billion in the same month in 2020. Photograph: iStock

Irish households saw their deposits rise by €587 million to €131.5 billion during May, compared with an increase of €1.5 billion in the same month in 2020. Photograph: iStock

 

The growth in savings being put away by Irish consumers moderated in May as pandemic measures eased, new data from the Central Bank show.

Irish households saw their deposits rise by €587 million to €131.5 billion during the month, compared with an increase of €1.5 billion in the same month in 2020. It represented an annual growth rate of 11.9 per cent in total, down from a peak of 14 per cent recorded in recent months.

May saw the phased reopening of non-essential retail, along with services such as hairdressers and barbers.

The increases in savings were driven by overnight deposits, which include current accounts, the Central Bank said.

Lending to households remained subdued, with net lending down €67 million during the month. On an annual basis, net lending was flat, recovering from a rolling six months of negative figures.

Home loans were down by €86 million in the month, with the annual rate of growth at 0.6 per cent. That compared with growth of 1.6 per cent in the same period a year earlier. Net flows for the year were €451 million, up from the €408 million recorded in April.

Lending

Consumer lending showed its first positive figure since December, with a net increase of €25 million in the month. However, that was not sufficient to lift the annual growth rate into positive territory, with consumer lending falling 3.1 per cent or €367 million.

Net lending to non-financial corporations (NFCs) was also positive in May, increasing to €169 million during the month. However, repayments exceeded drawdowns by €2.2 billion on an annual basis, falling by 5.6 per cent.

NFCs also saw a negative net flow in deposits, falling by €1 billion in May, and 15.8 per cent in the year to May. That slowed from the annual figure recorded in April, when growth stood at at 19.4 per cent.

Overall, total bank lending to Irish resident sectors was 3.5 per cent lower in the year, amid a 2.3 per cent decline in lending to the private sector.

Deposits from the Irish resident private sector remained strong at 13.4 per cent annual growth at the end of May 2021.