PRODUCT PROFILE

Latest Dublin Prices

Deposits rise for 1st time in over 2 yrs

Friday, September 28 11:23:07

Deposits at Irish banks rose on an annual basis for the first time since June 2010, though the decline in lending to both households and businesses continued during August, latest figures from the Central Bank show.

Private-sector deposits increased by 0.7 per cent over the year ending August 2012, compared with an annual decline of 0.8 per cent at end-July. Deposits from households were 0.8 per cent higher on an annual basis at end-August, while deposits from Insurance Corporations and Pension Funds (ICPFs) and OFIs increased by 1.7 per cent.

Deposits from NFCs (companies, or Non Financial Corporations) fell by 0.9 per cent over the same period.

There was a month-on-month increase of E1.6 billion in Irish resident private-sector deposits during August 2012, reflecting increases across three of the four depositor sectors. Loans to households continued to decline during August 2012 and were 3.7 per cent lower on an annual basis, following a decline of 3.6 per cent for the year ending July 2012. Lending for house purchase was 2.1 per cent lower on an annual basis in August 2012, while lending for consumption and other purposes declined by 8.3 per cent over the same period.

Lending to households declined by E500 million during the month of August, following a net monthly decrease of E471 million in July. Developments in August were mostly driven by a decline in loans for other purposes of E277 million. Loans for house purchase also fell by E151 million, while loans to households for consumption declined by E72 million. The monthly net flow of loans to households averaged minus E305 million in the three months ending August 2012, which consists of average net flows of minus E71 million in loans for house purchase, minus E104 million in loans for consumption purposes, and minus E130 million in lending for other purposes.

Lending to Irish resident non-financial corporations (NFCs) declined by 3.2 per cent in the year ending August 2012, following an annual decline of 3.4 per cent in July 2012.

On a monthly basis, loans to NFCs decreased by E234 million during August, following a decrease of E297 million in July. The monthly net flow of loans to NFCs averaged minus E310 million in the three months ending August 2012, compared with an average of minus E345 million in the three-month period up to end-July 2012.