Deposits at guaranteed banks rise by €2.1bn
DEPOSITS AT the Government-guaranteed banks rose by almost €2.1
billion to €149 billion in March, a rise of almost 1 per cent and
the largest increase since September
, according to figures from
the Department of Finance.
About half of the increase at AIB, Bank of Ireland, Permanent TSB
and the former Anglo Irish Bank, now known as Irish Bank Resolution
Corporation, came from growth in domestic deposits, which the
department described as “an encouraging trend”.
Goodbody Stockbrokers chief economist Dermot O’Leary said in a
research note that there appeared to be a trend of deposits
switching from non-guaranteed banks to guaranteed banks.
Figures released by the Central Bank showed private-sector deposits
at the guaranteed or “covered” banks rose to €103.9 billion at the
end of March from €102.7 billion a month earlier.
Irish-resident private-sector deposits rose by €798 million, mostly
due to an increase of almost €761 million in household deposits,
bringing total Irish household deposits to €92.1 billion at all
banks operating in Ireland including IFSC and foreign banks.
Total deposits at banks operating in Ireland declined by €15
billion primarily as a result of a €10 billion decline in deposits
by euro area, non-Irish depositors.
The decline “largely reflects inter-affiliate transactions by
IFSC-based banks”, the Central Bank said in its release on the
money and banking statistics for March.
Borrowing by the Irish guaranteed banks from the European
Central Bank fell to €65.4 billion at the end of March from €67.2
billion a month earlier.
Overall liquidity to the guaranteed banks totalled €110 billion,
including €45 billion of exceptional liquidity assistance loaned by
the Irish Central Bank in emergency lending.
ECB borrowing by domestic banks, including the guaranteed banks and
foreign subsidiaries such as Ulster Bank and KBC, rose by €3.7
billion to €75 billion.
The Central Bank said the increase was due to the borrowing of
three-year cash from the ECB through the longer-term refinancing
operation, which flooded the euro area’s banking sector with more
than €1 trillion in cheap funding.
While the funding at the guaranteed banks improved in March,
lending to households continued to decline, falling by €167 million
or 3.9 per cent on an annual basis.
Consumer loans and mortgages declined by €115 million and €15
million respectively in March.
Loans to non-financial companies rose by €34 million in March
following a decline of €167 million the previous month.
“Although these latest banking figures are encouraging to some
degree, particularly in relation to the deposits side, the
underlying message from the data is still one of overall weakness
and difficulties in the sector,” said Bloxham chief economist Alan