From Dec 2006 - - Source: Irish Central Bank

Irish private sector credit continued to decline in January according to data issued today by the Central Bank.

Headline private sector credit (PSC) fell by 7.1% in the year ending January 2010. Just over half of this annual decline is a result of valuation effects, such as write-downs of loans and increased bad-debt provisions. Residential mortgages (including securitised mortgages) declined by €269 million during January. Mortgages outstanding were €147.4 billion at end-January 2010. The annual rate of change in mortgage lending fell to minus 0.7 per cent.

The Central Bank said today that the general strengthening of the euro against other major currencies through most of 2009 contributed to the non-transactions related decline in headline PSC, as the book value of non-euro denominated loans fell. Excluding these non-transaction related valuation effects, the decline of PSC in the twelve months ending January 2010 was minus €11.2 billion. This is equivalent to a fall in the underlying stock of PSC of 3.1 per cent over the period.

The bank said the pace of decline in outstanding indebtedness on personal credit cards was minus 1.3 per cent. Total repayments were €83 million higher than new spending in January. The combined developments in both mortgage and non-mortgage credit during January, excluding valuation effects, led to a reduction of 0.5 per cent in total household credit during the month. On an annual basis, household credit excluding valuation effects declined by 2.2 per cent in January 2010, following year-on-year

The bank said the acquisition of loans by the State toxic property loans, the National Asset Management Agency (NAMA), will have a significant impact on the data series published by the Central Bank. In particular, the expected write-downs associated with the transfer of assets to NAMA are not all reflected in the current numbers and the data series, will, therefore, need to be revised for the latest months. The composition of the aggregate Credit Institution balance sheet post-NAMA transfers will also be significantly different.