€61m a day: the amount Irish households are saving

With Level 5 restrictions in place nationwide, household deposits continued recent trends

The Central Bank of Ireland.

The Central Bank of Ireland.

 

Irish households saved over €61 million a day last month, according to new figures from the Central Bank. That’s around €500 over the month for every adult in the State.

The additional €1.9 billion n household deposits brought the figure to a new record of €126.4 billion, continuing a run over recent months.

With Level 5 restrictions in place across the State, household deposits continued recent trends by growing substantially. Meanwhile, consumer lending recorded a sharp decrease as repayments exceeded new drawdowns by €205 million in net terms.

Net lending to households contracted by €322 million in January, reflecting a continuing trend of subdued lending flows. In annual terms, repayments exceeded new lending by €216 million or 0.3 per cent, representing the largest decline since April 2017.

Loans for house purchases decreased by €111 million in net terms over the month. In annual terms, the growth rate in January continued on a downward trend, but remained positive, at 0.8 per cent, down from 1.9 per cent a year earlier.

Consumer lending decreased in net terms by €205 million over the month. In annual terms, repayments exceeded new lending by €747 million or 5.9 per cent, marking the most negative annual growth rate since December 2014.

In January, net flows in convenience credit debt and overdrafts turned negative, while term lending and extended credit card debt continued to decline.

Overall, consumer and other household lending declines would have been larger if it was not for the agreement of payment breaks.

Deposits from households continued to reach new heights, and stood at €126.4 billion at the end of January.

Over the month, households’ deposits increased by €1.9 billion. In annual terms, household deposits recorded a net inflow of €15.1 billion or 13.5 per cent.

Overnight deposits, which include current accounts, were the driver of the monthly and annual increases in household deposits.

Net lending to non-financial corporations (NFCs) also remained negative in January, contracting by €132 million. On an annual basis, loans to NFCs declined by €1.4 billion or 3.6 per cent, mainly driven by short-term loans.

The monthly net flow in deposits from NFCs turned negative in January, amounting to minus €925 million.

This decrease was mainly attributable to overnight deposits and repurchase agreements. On an annual basis though, NFC deposits increased by €12.3 billion, resulting in an annual growth rate of 20.4 per cent.

Elsewhere, total bank lending to Irish resident sectors declined by 0.2 per cent in the year, as the increase in lending to monetary financial institutions partly offset the decline in lending to the private sector of 2.1 per cent in annual terms.

Banks’ holdings of deposits from the Irish resident private sector continued to record strong inflows, with annual growth reaching 15.2 per cent. Irish resident households remain the largest contributing sector to deposits on banks’ aggregate balance sheet.

Irish-resident banks’ outstanding borrowing from the Central Bank as part of Eurosystem monetary policy operations remained unchanged in January, standing at €7.3 billion.