Source: Irish Central Bank

The Central Bank today published for the first time the new series of money and credit data in Money and Banking Statistics, which shows that the annual rate of change in loans to Irish households was minus 4.1% in June 2010, following a decline of 3.1% in May. Domestic banks owed €54.8bn to the European Central Bank.

The Bank said the underlying the aggregate trend for households, lending for house purchase was 1.5% lower on an annual basis in June 2010 (minus 1.3%, May), whereas lending for consumption purposes had declined by 13.1% (minus 10.1%, May). Lending to the household sector for other purposes, which would include lending to sole traders and lending for investment, etc., declined by 12.6% in the year ending June 2010.

The net flow of household lending during the month of June 2010 was minus €904m, as the household sector continued to repay loans to a greater extent than drawing down new loans. The monthly net flow of loans to households averaged minus €790m in the three months ending June 2010, which consists of an average net flow of minus €390m in loans for house purchase, minus €286m in consumption loans and minus €113m in lending for other purposes.

Lending to the non-financial corporate (NFC) sector declined by 2.5% in the year ending June 2010, following an annual decline of 3.9% in May. NFC loans with an original maturity of over 5 years have seen the sharpest decline, falling 11.3% on an annual basis in June. Meanwhile, the rate of change in NFC loans with an original maturity of less than one year, which would include the use of overdraft facilities, turned negative for the first time in June 2010, to minus 0.7%.

The monthly net flow of NFC loans remained positive in June 2010, as it had been in May. NFC draw-downs were approximately €20m greater than loan repayments during the month.

The pace of growth in credit to the "other financial intermediaries", or OFI sector, which includes, among others, special-purpose vehicles (SPVs), continued to be strong. The most recent growth in credit to this sector has been driven by credit institutions’ holdings of debt securities issued by the NAMA SPV in purchasing land and development loans. Holdings of debt securities issued by Irish resident OFIs, including NAMA, grew by 38.2% in the year ending June 2010.

Source: Irish Central Bank

Deposits

Deposits by the Irish resident private sector rose by 0.5% on a year-to-year basis in June 2010. The annual rate of change in deposits from Irish households turned negative in May, and declined further to minus 1.3% in June. Deposits from Irish NFCs fell by 7% on an annual basis in June, whereas the pace of increase in OFI and insurance corporations and pension fund (ICPF) deposits slowed to 11.2%.

The net monthly flow of Irish resident private sector deposits averaged minus €1.1bn in the three months ending June 2010, after averaging minus €77m in the three months ending May 2010, as declines in overnight deposits, and deposits with an agreed maturity outweighed the continuing increases in short-term savings deposits (redeemable at notice).

Private sector deposits from other euro area residents declined by 2.7% in the year ending June 2010, whereas those from non-euro area residents were 8.6% lower. The underlying net monthly flow of non-resident private sector deposits, averaged minus €35m in the three months ending June 2010.

Credit institutions’ borrowings from the Central Bank as part of Eurosystem monetary policy operations of the European Central Bank declined by almost €3.2bn in June 2010, to €87.3bn. Of this, approximately €54.8bn was with respect to domestic market credit institutions.