Lending to households fell 5% in February

LENDING to households in Ireland continued to fall in February reflecting the impact of a weak economy and falling incomes.

The latest monthly statistics from the Central Bank show that loans to Irish households fell by 5.1% — matching the pace of decline witnessed in January.

In that same category mortgage lending was down 2.7%, while lending to consumers for other purposes fell by 13.7%.

Lending to businesses showed a 1.6% annual fall, compared with a dip of 1.4% in January.

Elsewhere, Irish resident private sector deposits fell 9.8% in the month compared to the same period last year which showed a faster pace of decline than the 8% recorded in January, according to the statistics.

February also saw a fall of almost €1.8 billion in Irish private sector deposits last month.

Credit institutions’ borrowings from the Central Bank as part of Eurosystem monetary policy operations fell by almost €10bn in February 2011, to €116bn.

Domestic market credit institutions accounted for €88.7bn of this outstanding amount — a fall of €7.4bn during the period.

The net monthly flow of overnight deposits from the Irish resident private sector was down €263 million in the period, driven by a decline of €266m in overnight deposits.

Short-term savings deposits — those redeemable at notice of up to three months, fell €222m during the period with household deposits in this category €250m lower at the end of February, giving an annual rate of decline of 10.2%.

Private sector deposits from other euro area residents declined by 10.7% in the year ending February 2011, whereas those from non-euro area residents were 32% lower.

Overall the underlying net monthly flow of non-resident private sector deposits was down by €2.2bn in February, split almost evenly between euro area and non-euro area residents.

That fall in non-resident private sector deposits was predominantly driven by declines in interbank deposits, the Central Bank said.

Credit institutions’ borrowings from the Central Bank as part of Eurosystem monetary policy operations fell by almost €10bn in February 2011, to €116bn.