Data published by the Central Bank shows that Credit growth continued to pick up for both Irish households and non-financial corporations in May.
The figures show that household credit grew by 2.1% year on year (yoy) in May, the fastest rate of growth since June 2009. Household credit is dominated by mortgages, which grew by 1.7% yoy in May (fastest since November 2009).
Goodbody Stockbrokers say this suggests that gross lending continued to grow in the second quarter, despite some of the weaker housing market data. However, consumer credit growth also picked up, growing by 5.3% yoy in May, with a large contribution from consumer car finance.
Credit to non-financial corporates grew by 5.1% yoy in May, the largest increase since March 2009.
According to Goodbody Stockbrokers, "While we don’t have further information at this stage, it is likely that this is being dominated by credit growth among large enterprises, with SME lending continuing to decline. Following a decade of deleveraging, balance sheets are now clearly on the increase for the Irish banks. In both cases, deposits continue to grow at a faster pace, contributing to further declines in the system-wide loan-to-deposit ratio."