Irish banks’ foreign claims fall by €7bn

The amounts due from foreign residents and overseas companies to Irish banks fell by €7 billion to €106 billion during the three months to the end of March, updated statistics from the Central Bank show.

The consolidated banking statistics detail the claims of the domestic banks on the rest of the world, by counterpart country and sector on an ultimate risk basis.

The Central Bank said at end-March 2013, the domestic banks had foreign exposures of €106 billion. The decrease was driven by a decline in claims on foreign private sectors, which fell by €5.3 billion (6 per cent) over the quarter.

By far the largest share of domestic banks’ claims is on the UK, with exposures of €78 billion located there. Foreign claims on the UK decreased by 7.2 per cent over the quarter.

The outstanding amount of foreign claims on the US increased by 2.4 per cent during the first quarter, with the increase in claims by domestic banks on US credit institutions more than offsetting the decrease in claims by domestic banks on the US public and private sectors.

Meanwhile, France, Spain and Germany also continue to hold a sizeable share of the foreign claims, although they declined by a collective €400 million over the quarter.

The Central Bank said the reduction in foreign claims since mid-2009 had been driven by a fall in cross-border credit, which was declining at a much faster annual rate than local claims.