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Banking sector saw rise in deposits, decline in lending in 2012

Deposits from insurance corporations and pension funds also saw an increase last year.

Image: William Murphy via Flickr

NEW FIGURES FROM the Central Bank of Ireland show that lending to Irish households decreased by 3.6 per cent in the year to end November 2012 while deposits by households were 1.4 per cent higher on an annual basis.

The data shows lending for house purchase was 1.6 per cent lower on an annual basis last year and lending for consumption and other purposes also fell by 1.9 per cent.

Lending to businesses outside the financial sector declined by 3.9 per cent in the year which follows a consistent decrease of 4.2 per cent for each of the previous two months.

On an annual basis, loans to these institutions with an original maturity over five years remained constant over the year to November 2012. Short-term loans to non-financial institutions declined by 0.8 per cent in the year, while medium-term loans declined by 12.1 per cent over the same period.

Credit institutions’ holdings of debt and equity securities issued by the Irish private sector saw a decline of 5.5 per cent last year.

As with deposits from households, deposits from insurance corporations and pension funds increased by 6.8 per cent while deposits from businesses outside the financial sector fell 1.5 per cent.

At the end of November 2012, the outstanding stock of borrowing by institutions from the Central Bank as part of the Eurosystem monetary policy stood at €78 million.

Of the total, domestic credit institutions, which mainly lend to households, retail businesses and other non financial firms, accounted for €65.7 billion.

Read: Cost of living in the Eurozone rose by 2.2pc in 2012>

Read: Ulster Bank the latest to announce branch closures>

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