Household lending fell in August, Central Bank figures show

Household and mortgage loans declined in August compared to the same period in 2015, according to new figures from the Central Bank.

Household loans declined by 3.1 per cent while the value of mortgages – which account for 83 per cent of on-balance sheet household lending – fell by about €159 million for the month.

In year-on-year terms, there was a 1.9 per cent drop in mortgage loans while borrowers repaid €1.4 billion more than the sums advanced.

Non-housing loans increased by €41 million in August.

Growth in credit card spending was predominantly driven by education costs, the Central Bank said while, in annual terms, non-housing loans for consumer and other purposes declined by 1.4 per cent.

Deposits from households declined by €519 million, reversing the net increase recorded in July.

In annual terms, household deposits increased by €2.3 billion or 2.4 per cent.

Outstanding stock

“Irish households continued to be net funders of the Irish banking system for the fourteenth consecutive month,” the Central Bank said in a statement.

“Banks now hold €7 billion more household deposits than loans. By contrast, in early 2009, household loans exceeded deposits by €53.5 billion.”

The data released on Friday also showed Irish banks were holding €1.3 billion in “non financial corporation” (NFC) deposits than loans for the month, the first time the trend had reversed itself since 2003.

Lending to NFCs declined by €3.2 billion or 6.5 per cent in annual terms in August.

Medium-term net lending in the sector grew by 7.9 per cent year-on-year, with draw-downs exceeding repayments by €991 million.

In contrast short-term net lending declined by €2.8 billion over the past 12 months.

Irish bank borrowing from the Central Bank, as part of Eurosystem monetary policy operations, increased by €200 million in August.

This reversed a decline in the previous four months.

The outstanding stock of Central Bank borrowings was €7 billion, with the domestic market banks accounting for 94 per cent.