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Loans to households fell 4.3pc in Nov

Friday, January 03 11:53:22

Loans to households declined at a rate of 4.3pc year-on-year in November, compared with annual falls of 4.2pc in the two previous months, latest Central Bank figures show.

Lending for house purchase continued to be the main category driving the change, declining at an annual rate of 2.8pc. Lending for consumption and other purposes, which accounts for around 23pc of total household lending, fell by 9.0pc over the same period.

Household loan repayments exceeded draw-downs by E403m during November, following a net monthly decrease of E472m in October. Developments in November reflected the decline across all three categories of household loans; loans for house purchase fell by E268m, while loans for consumption and other purposes decreased by E123m and E12m, respectively.

Meanwhile, the annual rate of change in Irish private-sector deposits remained positive in November. Private-sector deposits rose by 8.5pc over the year following an annual rise of 7.6pc in October. Annual private-sector deposit developments were driven by other financial intermediaries, whose deposit holding with Irish credit institutions rose by 39.4pc.

Non-financial corporate deposits also increased over the year to end-November by 9.1pc. Meanwhile, deposits from insurance corporations and pension funds and households declined by 7.0pc and 0.8pc, respectively over the year.

There was a monthly decrease of E322m in Irish resident private-sector deposits during November. This was due to a fall in deposits from households and insurance corporations and pension funds of E582m and E115m, respectively. Against that, deposits from other financial intermediaries and non-financial corporates showed respective increases of E310m and E65m over the month. Excluding the impact of the IBRC liquidation transaction in March 2013, other financial intermediaries' deposits would have fallen 0.2pc on an annual basis in November and total private-sector deposits would have been up 0.7pc over the year.

"The credit data remain the most disappointing as regards Ireland's recovery story. These latest figures show that there is still little real progress being made in terms of advancing loans to households or indeed the SME sector. As a result, this will severely hamper the overall recovery prospects for the housing market and the Irish economy as a whole, and keep the unemployment rate higher than it would otherwise be," said Alan McQuade of Merrion Stockbrokers.