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 30th April 2012 and shows that during the month of April 2012, deposits by ordinary households and businesses actually increased substantially 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 €3.7bn from €103.9bn in March 2012 to €107.6bn in April 2012 was the biggest monthly increase since before the bailout in November 2010. Deposits are now back at May 2011 levels which is indeed very positive but are still down €17bn from October 2010, the month before the IMF/EU bailout. Private sector deposits fell at covered banks in the past 12 months by €0.6bn from €108.2bn to €107.6bn, but most of that fall took place in May/June 2011 when the intensifying Greek crisis undermined confidence across the PIIGS countres. After four months of modest rises and with a €1.2bn increase in March 2012 and €3.7bn in April 2012, I think it is fair to say there are tentative signs of stabilisation and growth. The CBI commentary on the figures is here and the main source for the increase is “repurchase agreements” at “Other Financial Intermediaries”.
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 decreased by €83m in April, which brings such deposits to €92.0bn, the same as the June 2011 level. Total deposits from all sources in all Irish banks fell €5bn in April, mostly as a result of a decline of €6bn by Monetary Financial Institutions (MFIs, see below).
This morning has also seen the publication of the fourth “Deposits trends” note by the Department of Finance which confirms what the CBI is saying, and it shows retail deposits at the covered banks increasing by €2bn in April 2012 and such deposits now stand at €151bn. These figures include deposits at overseas operations of Irish banks eg the Bank of Ireland/Post Office joint venture in the UK. However the Department does say that one half of the increase in the month is from deposits at Irish branches. So again, the bouquet is positive, and should be welcomed as good news.
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)
This does look very positive when compared to Spain, which reported today that it has a net capital flight loss of over 97 billion euros during the first three months of the year. Not sure what this might have to do with flight, but Ireland has basically two banks and Spain is said to have 60. After this over with, if ever, Spain will be down to about ten.
http://www.eleconomista.es/economia/noticias/4008385/05/12/La-salida-neta-de-capitales-de-Espana-llego-a-970909-millones-hasta-marzo.html
CBI Stats:
I note the total deposits in the Covered Group still fell by around 6.3bn overall as the Private Sector increase was wiped out by:
- A 3.7bn fall in Rest of World deposits
- A 6.2bn fall in MFI deposits (mirrored in the Total Banking System stats).
I am still wary about the covered group stats being unconsolidated compared to the other two groups. With that in mind, is the following footnote on Table A.4.2 new?
Data in this table differs significantly from the Consolidated Banking Data for these institutions, which nets out intra-group positions and reflects activities of non-resident affiliates. These data are available at:
Consolidated Banking Data
The link for Consolidated Banking Data seems to be broken though!
One would guess that given the level of fear out there recently we’ll see a drop in the coming months.
Given the CBI’s record with data, I suspect we will see a rise.
“There was a month-on-month increase of almost €4 billion in Irish resident private-sector deposits during April. This largely reflected developments in deposits from the OFI sector, which rose by almost €3.4 billion during the month. The covered institutions accounted for the majority of this increase. NFC deposits also increased, by €291 million, while household deposits decreased by €104 million.”
Euro and rest of world deposits down, household deposits down.
NFC & OFI up, (OFI significantly).
The OFI increase has certainly put a positive spin on things, but this could be 1 hedge fund/investment/pension fund transaction (unconsolidated at that).
Lets not get too excited yet, could be a blip….
@JR, indeed the €3bn OFI transaction may indeed be a blip, but it comes on top of a €2bn increase in private sector deposits at covered banks in March and four months of flat deposits. Looks stable and growing to me!
http://www.irishtimes.com/newspaper/finance/2012/0525/1224316662581.html#.T-frprhWRv0.mailto……..
hello.?
@bar, thanks for that. The full judgment is here
http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Ch/2012/1377.html&query=bank+and+of+and+ireland&method=boolean
“I did not find Mr Cunningham’s [representing Bank of Ireland] evidence wholly satisfactory. He is plainly an astute Banker, who was keen to see the case against Mr Jaffery as a ring-fenced allegation of breach of fiduciary duty. But he did not strike me as a man who would have been so concerned about fiduciary duties, had there not been some other political or reputational angle to the events which occurred. He had, after all, himself been involved in politics. I formed the very distinct view that he was hiding something in giving his evidence. He and Mr Jaffery had plainly not got on (though something Mr Jaffery said in closing made me think it might have been more of a love hate relationship than a simple incompatibility), and I am quite certain that there is some truth in the allegation that he and Mr Jaffery regularly discussed the more contentious issues affecting the Bank . I will deal with the specific conversation on which Mr Jaffery relies as constituting the Bank ‘s consent to his following his own business interests when I deal with Mr Jaffery’s evidence in due course, and in addressing the issues that I have to decide.”
The memorandum – of 12th May 2011 – written by staff in BoI London, setting out the modus operandi of Jaffrey and his mates is highly significant; this is included in the judgement.
How senior BoI management allowed such practices to continue is hard to comprehend and this lack of monitoring/controls was a direct cause of the problems raised by the case.