25 October 2014

Banks continue to reduce borrowing from ECB

09:26, Post Reporter

Banks operating in Ireland continue to reduce their level of borrowing from the European Central Bank (ECB), according to new data from the Central Bank in Dublin.

Drawings from the ECB by so-called covered banks - the main Irish-owned institutions - continued to decline during the month of June to stand at around €34.76 billion.

During June total utilisation of ECB facilities by banks in Ireland declined by €0.8 billion, about 2 per cent, to about €46.1 billion. That figure marks the lowest level since September 2008.

The Central Bank figures also showed that deposit volumes remained stable in June 2013 at €152.03 billion. June 2012 versus June 2013 showed a fall in headline volume growth for the last 12 months with headline deposits down about €0.8 billion, or 0.5 per cent.

“The moderation in the rate of growth of deposit volumes is not unexpected when account is taken of the deposit gathering initiatives by the Covered Banks in 2012, together with the substantial completion of their deleveraging programmes,” said the Central Bank. “These factors have resulted in a lower balance sheet funding requirement among the covered banks, which is supported by the return of the Covered Banks to market issuance in the second quarter of this year.”

The bank said that “as anticipated” it continues to observe an “insignificant impact” on deposit volumes in the covered banks as a result of the ending of the government’s bank guarantee for new liabilities in March.

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