Consumer bank debt down 23%

THE level of money owed to the banks by way of consumer loans, fell by 23% – or just over €6 billion – in the last year, as borrowers moved to reduce their debts.

According to updated Central Bank statistics – published yesterday as part of the authority’s latest quarterly bulletin – the amount owed to the banks through consumer loans amounted to €26.97bn in July 2009, and fell to just over €20.7bn by the same month this year.

Over the same timeframe, money owed on mortgages fell from €114.16bn to just under €107.4bn.

The category of ‘other loans’ – including all non-housing and consumer loans, and things such as credit card debt and student loans – rose from €6.2bn to €11.1bn, meanwhile.

In terms of deposits, the latest figures show that the amount of money householders have in either their current or savings accounts has dipped – though only marginally – from €98.9bn in July of 2009 to just above the €97bn mark in the same month this year.

The latest stats also highlight just how much Ireland’s national debt levels have increased in the last year. The National Treasury Management Agency’s (NTMA’s) successful round of nine monthly bond auctions – up to the end of last month – may have matched its borrowing targets of €20bn, for 2010, but have also seen the country’s overall debt levels rise from just under €71bn, as of the end of last December, to €87.23bn at the end of August.

In the wake of the recent widening of yields related to long-term Irish Government bonds, the NTMA has shelved its last two scheduled bond auctions for this year.

This means that the up-to-date debt figure is unlikely to increase too much more before the end of the year as the NTMA isn’t due to go back to the markets until January and is already funded up to the mid-point of 2011.

The Central Bank said yesterday that Ireland’s overall economic recovery is still on course, but is more likely to be gradual and uneven rather than consistently robust.


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