Central Bank figures show huge falls in Irish credit

Dramatic falls for the amounts of bank loans in the economy reveal the huge extent of so-called deleveraging that is still going on here eight years after the onset of the crash.

According to Central Bank figures, the total amount of loans outstanding to businesses — or non-financial corporations — stood last month at €47.4bn, down from a peak of €171.3bn on the eve of the crash in August 2008. It is the same as February 2003 levels, despite the fact that ECB rates are at rock-bottom levels.

Lending to businesses has shrunk during the year and has dropped from €60.5bn in December 2014.

The lending figures will likely again raise concerns about how the domestic economy— in particular Irish-owned SMEs — can thrive if the amount of credit available continues to shrink.

Multinationals, which have led the Irish economy’s exports drive, have few issues in raising funding. Statistics for mortgage loans show a similar picture.

House purchase loans stood at over €76.9bn last month, little changed from November, but are about €1.3bn lower than the €78.2bn in home loans outstanding in December 2014.

The amount of mortgage loans outstanding is back at October 2003 levels, as new loans fail to offset the amount of home loans borrowers are paying off.

Credit advanced to households for purposes other than buying homes totalled €11.2bn last month.

That is down from €11.5bn in December 2014 and compares with a peak of €28.9bn in January 2009.

It is now back at levels last recorded in late 2003.


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