Household Lending Falls in November
Lending to households and businesses fell in November as deposits continue to leave Irish banks according to the figures released recently by the Central Bank.
2010’s lending for mortgages also fell by 1.7% compared to the previous year, as shown in November’s money and banking statistics. This is said to be caused by increased dependency of Ireland’s lenders to the European Central Bank (ECB) funding, while deposits leave Irish banks and as the wholesale funding markets remain unstable. ECB lending to banks operating in Ireland surmounted to €138.2 billion.
€5.3 billion in household deposits continue to leave Irish banks during the year 2010 till the end of November, a trend which is worrying economists in Ireland.
In the year to November, a total of over €26 billion of private sector deposits and those from insurance firms and pension funds left the country. Lending to non-financial businesses also fell by 1.9% during the period.
“If we can’t have businesses surviving, we won’t have jobs being created and we will certainly face a challenge in containing and controlling the jobs that we already have. At the time creditors crediting at many small firms, it is surprising that SME lending is showing a weakness. And I think it’s because a lot of firms are concerned about the availability and also of the success of accessing this credit”, Avine Mcnally (Small Firms Associations) said during an interview at RTÉ news.
Household lending, loans to house purchases and consumer loans also fell as shown in the recently released Central Bank’s figures.