Lending declines accelerate

Latest figures from the Central Bank published today show that falls in lending to Irish consumers and businesses gathered pace in May.

Loans to households were down 4.8% on a year-to-year basis to end May, compared to a decline of 4.6% in the 12 months to the end of April.

Mortgage lending was 2.1% lower on an annual basis in May, while lending for consumption and other purposes declined by 13.6%.

Lending to businesses in non-financial corporate (NFC) sector declined by 2.6% in the year, following an annual decline of 2.3% in April.

The Central Bank said business loans of between one and five years in term were down €222m.Longer-term loans with a maturity of over five years also declined during the month, by €99m, while short-term business loans of up to one year, which includes the use of overdraft facilities, increased by €234m.

Meanwhile private-sector deposits fell by 8.7% on a year-on-year basis, following a decline of 9.1% over the 12 months ending April.

The sum of private-sector deposits fell by €752m in May, driven almost entirely by a €709m outflow in household deposits.

Meanwhile credit institutions’ borrowings from the Central Bank as part of Eurosystem monetary policy operations fell by €3.8bn in the month, to €102.3 billion. Domestic banks accounted for €74.4bn of this.