Consumer loans advanced by Irish banks exceeded repayments by €162 million in the three months to end- May 2017, continuing a trend evident since early-2016. These types of loans typically include car loans, furniture, domestic appliance and holiday loans; with overdrafts and credit cards also included. Credit card debt represented approximately 20 per cent of outstanding consumer bank credit in May.

Developments in Household credit and deposits

  • Loans to households, adjusted for loans sales and securitisations, declined by 2 per cent in annual terms to end-May.[1]
  • Mortgage loans, which account for 83 per cent of total on-balance sheet loans, decreased in net terms by  €96 million in May (Chart 1). This follows a decrease of €105 million in April. In year-on-year terms, net mortgage lending declined by €458 million, or 0.6 per cent.
  • Non-housing loans increased by 1.9 per cent in annual terms to end-May, representing seven consecutive months of annual growth. Drawdowns on consumer loans exceeded repayments by €618 million in the year to end-May. The monthly net flow in May was                  €11 million, down from €161 million in April. Loans for other purposes continued to record negative net flows, with repayments over the 12 months to end-May exceeding drawdowns by €327 million.
  • Deposits from households decreased in net terms by €730 million in May, reversing five months of net increases. In annual terms, household deposit lodgements were €2.9 billion higher than withdrawals, representing growth of 3 per cent over the year (Chart 2). Household deposits stood at €98.4 billion at the end of the month.
  • Developments in loans and deposits mean that Irish households continued to be net funders of the Irish banking system. Banks held €8.8 billion more household deposits than loans at end-May (Chart 3). In contrast, household loans exceeded deposits by    €72.6 billion in May 2008.

Developments in NFC credit and deposits

  • Net lending to NFCs declined by €1.7 billion, or  3.7 per cent, in annual terms to end-May.  There was a €182 million decrease in net NFC lending during May, which follows a revised increase of €357 million in April and marks the first month of decline since February.
  • Medium-term loans remain the only category with positive annual flows since the beginning of 2015. Over the month, drawdowns in these medium-term loans exceeded repayments by €90 million, representing annual growth of 0.4 per cent in the year to end-May. This is the lowest annual increase in recent months.
  • NFC deposits increased by €735 million in net terms in May, following an increase of €1.1 billion in April (Chart 5). This rise was predominantly driven by growth in overnight deposits.
  • Total NFC deposits grew by 4.3 per cent annually to end-May, compared to growth of 6.9 per cent recorded in April.

Developments in other counterparty sectors

  • Lending to the private sector has been the main driver of net lending to Irish residents since early 2014 and accounted for 74 per cent of banks’ loan books in May (Chart 6). In annual terms, outstanding loans to the Irish private sector declined by 2 per cent in May.
  • Credit institutions’ holdings of Irish issued debt and equity securities decreased by €648 million in May.
  • Irish banks’ borrowings from the Central Bank as part of Eurosystem monetary policy operationsdecreased by €20 million in May. The outstanding stock of Central Bank borrowings was €8 billion, with the domestic market banks accounting for 95 per cent of this.