Wednesday, April 24, 2013

24/4/2013: Credit demand conditions in Irish banks: Q2 2013

All's quiet in the Irish Banking 'sector' Zombieland, per CBofI latest missive (link):

Good news: there was an improved demand for Fixed Investment in Q4 2012. Since then, Q1-Q2 2013 shows zero growth in demand. Non-news: Operating capital is now again tight (Q4 2012 and Q2 2013) against zero change in Q1 2013. Bad news: restructuring demand is up again after posting zero growth in Q1 2013.

So on business credit demand side: no real economic activity growth is signalled by investment demand, poorer conditions in operating capital signalled by the respective demand increase (albeit very moderate rate of increase) and credit restructuring pressures are slightly up as well.

On households side:

House purchases credit demand is up, at weak and moderating rate. Nothing dramatic, really, but good-ish sort of news. 

Basically, things are flat. Again, you can read this as a somewhat positive (things are not getting worse), or you can treat it as somewhat negative (given rates of contraction in credit during the crisis, real recovery should see demand and supply spiking rapidly up). My view is - the above confirms the proposition that Irish economy is at near-zero real growth trendline and the banking sector remains a drag on growth.

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