4/1/2013: Irish Private Sector Deposits: November 2013

Central Bank of Ireland published series of data today covering deposits and credit in Irish banking system through November 2013. Here are the highlights on deposits. Credit side was covered in the previous post here: http://trueeconomics.blogspot.ie/2014/01/312013-irish-private-sector-credit.html

Here, we cover deposits and loan/deposit ratios:

• Private sector total deposits fell in November 2013 to EUR180.2 billion from EUR180.417 billion in October, but deposits are up EUR13.696 billion (+8.23%) y/y. 3mo average through November 2013 is up EUR13.259 billion on a year ago.
• However, private sector non-financial deposits (deposits by households and non-financial corporations) show much weaker performance than total deposits, rising only EUR1.357 billion (+1.11%) y/y in November and up just EUR969 million (+0.79%) year on year on 3mo average basis.
• The main reason total deposits are up is down to Insurance corporations, pension funds and other financial intermediaries booking a rise of EUR12.339 billion in deposits in November 2013 compared to November 2012.
• Households' deposits are down EUR1.013 billion (-1.1%) y/y in November and down EUR567 million compared to October 2013. 3mo average through November 2013 is down EUR975 million (-1.06%) y/y.
• Non-financial Corporations' deposits are up EUR2.37 billion y/y in November (up EUR1.944 billion on 3mo average basis) and are up EUR99 million on a monthly basis.

With private non-financial sector (households and NFCs) loans at EUR188.892 billion (down 0.59% y/y and down 0.79% m/m) and private non-financial sector deposits at EUR123.731 billion (up 1.11% y/y and down 0.38% m/m):

• Loans to deposits ratio in November 2013 stood at 153%, basically unchanged since August 2013 and marking the lowest level since October 2003.

Note: The data for both deposits and loans is  severely distorted by changing composition of banking institutions (exits by a number of banks from the market) and by regulatory changes (inclusion of new institutions, e.g. credit unions).

29/8/2013: Credit to Private Enterprises in Ireland: Q2 2013

Credit supply figures for credit extended to Irish businesses are out and make a depressing reading, once again.

Taken from the top, here's the summary of all latest (Q2 2013) changes:

I marked in green bold only those observations where there has been any sort of a positive movement either y/y or q/q. There are only five such subsectors: Water, Sewage & Waste Treatment, etc (although q/q the sector is again down on credit), Transport & Storage (although the sector is down y/y), Information & Communication (solid y/y rise, with a big question as to whether the credit increase is accounted for by the Eircom going back into leveraging up), Education (solid y/y gain, weak q/q growth) and Health and Social Work (down q/q, but up y/y).

We hear much about the fabled revival of fortunes in the construction sector and property investment sector. I am afraid there is none visible in the credit supply data:

Unless Russian oligarchs with suitcases of cash are rolling into town, where's the fabled 'pick up of building activity' being funded from? Mars? Or cash piles of our farmers?

Total credit is still shrinking, most critically, in the sectors excluding Financial Intermediation and Property:

Credit in Primary Industries and Manufacturing has flat-lined some 33-39 months ago and is showing no life since, which is sort of suggests that the PMIs (Manufacturing) 'boom' is a signal of skewed PMI metric, capturing more of the MNCs than of domestic activity:

When it comes to the 'brighter' spot of Transport - credit pick up is off extremely weak position:

In short, as credit is linked directly to investment activity, the above suggests continued deep-freeze in the economy through H1 2013. There seem to be no signs of revival so far, albeit caveats to this apply - this is just one indicator and it is an indicator that does not tell us much about new loans issuance as opposed to old loans expirations/maturing etc. Still, to get investment-driven growth, we need credit figures to rise. Not fall...