Latest figures show continuing decline in lending

New figures from the Central Bank show that lending to households continued to decline last month.

Loans were 4% lower in February 2012 on a year-to-year basis, following a decline of 3.9% for the year ending January 2012.

Mortgage lending fell by 2.5% in the year, while lending for consumption fell by 8.4%.

Lending to households declined by €355m during the month of February following a net monthly flow of minus €691m in January, the Central Bank said.

"Developments in February were largely driven by a decline in loans for house purchase of €224m, while loans for consumption and other purposes also decreased by €107m and €23m, respectively.

Meanwhile lending to the non-financial corporate (NFC) sector declined by 2.3% in the year ending February 2012, following an annual decline of 2.2% in January 2012.

The bank also revealed that resident private-sector deposits were 6% lower on an annual basis at end-February 2012, compared with a decline of 7% over the year ending January.

Deposits from households were 2.2% lower on an annual basis in February while deposits from NFCs declined by 8%.

Credit institutions’ borrowings from the Central Bank as part of Eurosystem monetary policy operations fell by €7.9bn in the month.