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Central Bank reports continued decline in Irish credit to non-financial corporations in March; Residential mortgage lending outstanding fell again
By Finfacts Team
Apr 30, 2010 - 12:47:58 PM
The Central Bank said today that there was a continued decline in Irish credit to non-financial corporations (NFCs), excluding valuation effects, as NFC credit fell by 4.6 per cent in the year ending March 2010, following annual declines of 3 per cent in January and 3.6 per cent in February 2010. Residential mortgage lending outstanding (including securitised mortgages) declined by €717 million during March, bringing the annual rate of decline in residential mortgage lending to minus 1.4 per cent.
NFC credit, excluding valuation effects and the impact of NAMA transfers, declined again in March 2010. The annual rate of change in NFC credit was minus 4.6 per cent in March, following a 3 per cent annual decline in January and a 3.6 per cent fall for the twelve months ending February 2010. NFC credit outstanding on the balance sheet of Irish resident credit institutions was €139.5 billion at end-March 2010, down from €141.3 billion at end-February.
Just under two-thirds of this decline was due to transactions, i.e. repayments being greater than draw-downs, giving an underlying fall in NFC credit, excluding valuation changes and NAMA transfers, of 0.8 per cent during the month. The remainder of the decline in outstanding amounts was due to the transfer of NFC loans to NAMA, write-downs and other technical factors.
Residential mortgages (including securitised mortgages) declined by €717 million during the month, and stood at €146.5 billion at end-March 2010. The annual rate of change in mortgage lending fell to minus 1.4 per cent3. Repayments on personal credit cards were approximately €71 million higher than new spending on credit cards during the month. The year-on-year change in personal credit card indebtedness remained positive in March at 0.5 per cent.
Approximately €70 million of loans to the Irish resident household sector, which would include lending to individuals and partnerships for investment purposes, were transferred to NAMA during March. The combined developments in both mortgage and non-mortgage credit during March, excluding valuation effects and the impact of NAMA transfers, led to a reduction of 0.4 per cent in total household credit during the month. On a year-to-year basis, household credit declined by 2.6 per cent in March 2010, following year-on-year declines of 2.2 per cent and 2.5 per cent in January and February 2010, respectively.
