Rise in deposits held by Irish banks


CREDIT TO Irish households fell in the first quarter of the year, while deposits rose, new data from the Central Bank has shown.

Deposits at Irish banks were €86.9 billion by the end of the quarter, up 1 per cent quarter on quarter, but 0.7 per cent lower on an annual basis.

By the end of March, the total credit outstanding at banks in Ireland was €99 billion, just over 4 per cent lower than the same period a year earlier.

Mortgages continued to decline in the first quarter of the year, decreasing by 0.6 per cent and representing a ninth consecutive quarterly fall.

The total value of mortgages outstanding on Irish banks’ balance sheets currently stands at €79.9 billion.

In contrast, the peak for home loans, including securitised mortgages, was hit in March 2009 at €149 billion.

The majority of the mortgages are what is known as “floating rate”, and include standard variable rate, tracker rate, and mortgages with a fixed rate up to one year.

Tracker mortgages accounted for 49 per cent of mortgages, although the figures had fallen by €276 million during the quarter.

Fixed rate loans accounted for 13 per cent of outstanding home loans.

Ratings agency Moody’s is predicting a further fall in the Irish property market, saying that house prices will dip an additional 20 per cent before the market reaches the bottom. The agency said the market has already fallen by 49.9 per cent from the peak in September 2007 until April 2012.

Moody’s estimates are in line with the Central Statistics Office, which said last month that property prices were down 50 per cent nationally from the peak. But the chief executive of estate agency Sherry FitzGerald, Mark FitzGerald, said the report was “misguided and misinformed”.

“The evidence of the market, which we experience every day, is that house prices in Ireland have already fallen by an average of 60 per cent, and in some places by as much as 65 per cent,” he said.

“It is the case that house prices in some parts of the country are continuing to fall, but the likelihood is that in other parts, particularly the cities, prices may start to recover.

“Indeed there are tentative signs that this is already happening in some areas of the market.”