PRODUCT PROFILE

Latest Dublin Prices

Irish banks cut ECB borrowing in Feb

Thursday, March 14 14:20:54

Banks operating in Ireland (i.e. both covered and non-covered banks) continue to reduce their level of borrowing from the ECB, latest figures from the Department of Finance showed today.

During February total utilisation of ECB facilities by banks in Ireland declined by E8.2 billion (around 12pc) to E61.9 billion - it's lowest level since September 2008.

Year-on-year, funding drawn from the ECB has reduced by E25.2 billion or 29pc.

The reduction from peak of E136.4 billion (end November 2010) is E74.6 billion or 55pc.

Meanwhile, there were more signs of stabilisation in deposits at Irish covered banks standing at E154.8bn.

This is an increase of around.E0.5bn (+3pc) during the month due to inflows of deposits from Corporate and Non-Banking Financial Institutions.

While headline deposits during February increased, the weakening of Sterling against the Euro since December has affected deposit values significantly. Headline UK Retail deposits are down c.E3.1bn since December with volume fluctuations only accounting for only c.E0.8bn of this movement, with the remainder attributable to unfavourable foreign exchange movements.

The cumulative growth for the last 12 months (i.e. Feb 2012 versus Feb 2013) remains strong with headline deposits up c.E7.7 bn (5.2pc) year on year although the pace of year on year increase has moderated somewhat.

The stability in customer deposit volumes among the covered banks comes at a time when the cost of deposit funding is reducing and the ELG scheme for new liabilities is being ended. While still very early in the process, there have been no negative trends or unusual deposit volume movements as a result of announcement to end the ELG scheme on 28th March 2013.