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Deposits from Irish households and non-financial corporations (NFCs) continued to record strong growth in October. Collectively, household and NFC lodgements exceeded withdrawals by more than €2.6 billion in October, continuing robust bank deposit trends observed in recent months. The outstanding amount of household and NFC deposits are the highest on record, standing at €123 billion and €70 billion, respectively.
Developments in Household credit and deposits
- Net lending to Irish households increased in October 2020, with households drawing down €114 million more than was repaid (Chart 1). In the twelve months to end October 2020, drawdowns exceeded repayments by €19 million reflecting subdued lending flows in the past twelve months. This contrasts with October 2019, where drawdowns exceeded repayments by €1.9 billion.
- Loans for house purchase increased in net terms by €97 million in October 2020; this compares to a net increase of €102 million in October 2019. In annual terms, the growth rate remained positive, at 0.9 per cent, down from 1.7 per cent a year earlier. Annual growth in mortgage lending net flows was €679 million, the lowest since July 2018.
- Consumer Lending recorded a net increase of €31 million in October 2020. However, on an annual basis, repayments exceeded new lending by €533 million over the year to end-October 2020. This represents an annual growth rate of minus 4.1 per cent.
- Deposits from households recorded a net increase of €1.7 billion in the month of October 2020 (Chart 2). In annual terms, lodgements were €12.6 billion higher than withdrawals, the highest annual increase in household deposits observed since the series began.
- Overnight deposits, which includes current accounts, were the driver of both the monthly and annual increases in household deposits (Chart 3). Overnight deposits recorded a net increase of €1.9 billion in October and grew by €15 billion, or 16.6 per cent, in annual terms.
- Developments in NFC credit and deposits
- Non-financial corporations (NFCs) repaid €363 million more than was drawn down during October 2020. On an annual basis, loans declined by €2.6 billion, with the majority of the annual decrease concentrated in the up-to-one-year maturity bracket (Chart 4). The annual rate of change in total NFC lending declined further to minus 6.5 per cent, representing the most negative annual growth rate recorded in the category since November 2015.
- Deposits from NFCs continued to record strong growth in October, recording a monthly net inflow of €898 million. This increase was mainly attributable to overnight deposits and repurchase agreements. In annual terms NFC deposits increased by €9.7 billion, representing an annual growth rate of 16 per cent (Chart 5).
Developments in other counterparty sectors
- Total bank lending to Irish sectors declined by 2.6 per cent in the year (Chart 6), driven by a decline in lending to the private sector, which experienced a fall of 1.7 per cent.
- Banks’ holdings of deposits from the Irish resident private sector continued to record strong inflows, with annual growth reaching 13.7 per cent. Irish resident households remain the largest contributing sector to deposits on banks’ aggregate balance sheet.
- Irish-resident banks’ outstanding borrowing from the Central Bank as part of Eurosystem monetary policy operations remained unchanged in October, standing at €7.3 billion.
Money and Banking statistics cover all credit institutions resident in Ireland. This includes licensed banks, building societies and, since January 2009, credit unions. A resident office means an office or branch of the reporting institution which is located in the Republic of Ireland. Data are reported in respect of resident office business only. Recent data are often provisional and may be subject to revision. For further detail, please see the Money and Banking webpage for:
- An extensive set of Money and Banking Tables;
- A list of Irish Resident Credit Institutions;
- Money and Banking statistics Explanatory Note.
Irish-headquartered banks refers to institutions whose ultimate parent entity is resident in Ireland.
A number of lenders have agreed payment breaks with their customers since the onset of the COVID-19 crisis. These breaks are likely to significantly affect the Money and Banking lending data in this period, predominantly by keeping outstanding loan balances higher than they would be, had repayments followed their initial schedule. As well as this, June data is affected by quarterly interest capitalisation, which increases balances in on-quarter months.