On Friday last, 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 March 2012 and shows that during the month of March 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 €1.2bn from €102.7bn in February 2012 to €103.9bn in March 2012 was the biggest monthly increase since Mar/Apr 2011 when deposits received a fillip from the March 2011 bank stress tests. Deposits are now back at June 2011 levels which is indeed very positive but are still down €21bn from October 2010, the month before the IMF/EU bailout. Private sector deposits fell at covered banks in the past 12 months by €2.4bn from €106.3bn to €103.9bn, 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, I think it is fair to say there are tentative signs of growth, 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 increased by €0.8bn in March, which brings such deposits to €92.1bn, the same as the June 2011 level. Total deposits from all sources in all Irish banks fell €15bn in March, mostly as a result of a decline in €10bn in deposits by euro area (non-Irish) depositors.
It should be said that the CBI has adjusted the Rest of World deposit figures for All Irish banks and the following increases to the figures have been identified – January 2012 (+716m), December 2011 (+727m), November 2011 (+701m), October 2011 (+675m), September 2011 (+693m), August 2011 (+576m), July 2011 (+192m). The CBI was asked a month ago about these adjustments but there was no response. Perhaps the next time someone has an opportunity to speak with Governor Honohan, they might ask why his Bank is altering past figures and do they think people won’t notice.
It should also be said that the Central Bank’s statistics do not include overseas deposits at Irish banks – for example, Bank of Ireland has a joint venture with the Post Office in the UK which attracts more than €10bn of deposits. And the figures may include what the Dept of Finance calls “consolidation differences”. Having said that, these are the most accurate figures on deposits in Irish banks in Ireland. The Department of Finance publishes its own deposit figures each month and has this morning published its figures for March 2012 which echo the growth suggested by CBI, and show that retail deposits at the covered banks grew by €2.1bn in March 2012 to €149bn and the Department says that “half the increase” came from deposits in Ireland.
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 of Ireland) 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)
NAMA Wine Lake 
@ NWL I think March may be an outlier. A large number of Public Sector lump sums were paid in the month for staff who left in February and this will have distorted the bank deposit figures. Assuming an average lump sum in the region of €90,000. It was also a five pay week month with the final & fifth pay day on Friday 30th.
These two causes would have left an excess of cash in bank accounts at month end and would explain a very large proportion of the increase
@Niall, that’s a very good point, and certainly not one I had considered. That said, March 2012 was the fourth month in a row where private sector deposits in the covered banks have increased, although the previous three months Dec-Feb had more modest increases.
@ NWL I agree with you. However the increase in March was quite substantial and it is the size of the increase that struck me. I agree that there is a slightly improved sentiment towards the Irish banks
My own (public sector based) credit union saw substantial increases in shares in February & March as staff received their lump sums. As you are aware the Credit Unions are obliged under instructions from the Regulator to place spare short-term money with the covered banks.
It would be interesting to know how much Credit Union money is propping up the covered banks.
However a “No” vote is likely to see any such improvement be reversed quite quickly,
Another outlier… In which month would Permanent TSB’s control of the NR deposit book have appeared?