Latest central bank statistics show continuing stabilisation of private sector deposits at covered banks

This morning, the Central Bank of Ireland (CBI) has released its monthly snapshot of the state of Irish banks focussing on deposits and lending. The data covers the period up to 31st January 2012 and shows that during the month of January 2012, deposits by ordinary households and businesses actually increased at the so-called “covered” or State-supported banks – essentially the two pillar banks, Bank of Ireland and AIB, and also Permanent TSB. The increase of €104m from €102.5bn in December 2011 to €102.6bn in January 2012 was smaller than the €1bn+ increase in December, but it nonetheless marks the second month of increases and means we are now back at deposit levels seen in July 2011, and that is in general terms, positive news. On this blog the key focus each month is on the movement in private sector deposits at the covered banks, as this is seen as a signal of banks returning to sustainable financing. Private sector deposits fell at covered banks in the past 12 months by €9bn from €112bn to €103bn, but most of that fall took place in the first six months of 2011 and the final six months has looked stable despite the ongoing crisis in the EuroZone. I think it is fair to say there are signs of stabilisation, but it would be a gross exaggeration to claim “deposits were flowing” into Irish banks.

The CBI doesn’t provide an analysis of deposits at the covered banks – about the only analysis it doesn’t provide – but in terms of all banks operating in Ireland including foreign and IFSC banks, Irish household deposits fell by €0.1bn in January after a rise of €0.6bn in December. Household deposits at all banks are now back at August 2011 levels. Total deposits from all sources in all Irish banks fell €3.8bn in January, mostly as a result of a decline in €4.3bn in deposits held by MFIs (see below for an explanation of MFIs)

Here is the full set of deposit statistics for the different categories of bank operating in Ireland.

First up is the consolidated picture for all banks operating in Ireland including those 450-banks based in the IFSC which do not service the domestic economy.

Next up are the 20 banks which do service the domestic economy and include local subsidiaries of foreign banks like Danske, KBC and Rabobank. There is a list of all banks operating in Ireland here together with a note of the 20 that service the domestic economy.

And lastly the six State-guaranteed or “covered” financial institutions (AIB, Anglo, Bank of Ireland, EBS, Irish Life and Permanent and INBS – Anglo and INBS have now been merged to form the Irish Banking Resolution Corporation, IBRC)

(1) Monetary Financial Institutions (MFIs) refers to credit institutions, as defined in Community Law, money market funds, and other resident financial institutions whose business is to receive deposits and/or close substitutes for deposits from entities other than MFIs, and, for their own account (at least in economic terms), to grant credits and/or to make investments in securities. Since January 2009, credit institutions include Credit Unions as regulated by the Registrar of Credit Unions. Under ESA 95, the Eurosystem (including the Central Bank ofIreland) and other non-euro area national central banks are included in the MFI institutional sector. In the tables presented here, however, central banks are not included in the loans and deposits series with respect to MFI counterparties.

(2) NR Euro are Non-Resident European depositors

(3) NR Row are Non-Resident Rest of World depositors (ie outside Europe)