Net consumer lending grows at largest level in almost 15 years

Net consumer lending in the 12 months to the end of November grew at its largest level in almost 15 years, increasing by €981 million, new data from the Central Bank shows.

The figure had declined during much of the Covid-19 pandemic and associated lockdowns, but has now grown consistently in more recent periods. The recent growth was driven by term loans, as opposed to overdrafts and credit card debt.

Consumer lending growth increased from 7.9 per cent in the 12 months to the end of October to 8.5 per cent in the year to the end of November, which was the largest annual rate of increase since October 2008.

Net lending to households was positive in November, at €250 million, compared with €174 million in October. On an annual basis, household loans (including securitised loans) increased by 1.7 per cent in November, up slightly from 1.6 per cent in the previous month.

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The annual change in loans for house purchase, when including both on-balance sheet and securitised loans, rose by 1.4 per cent in the year to end-November, unchanged from the previous month.

Loans for other purposes recorded net drawdowns of €110 million in November, compared with net repayments of €88 million in October. On an annual basis the series declined by 7.6 per cent, a slight decrease on the 7.7 per cent decline recorded the previous month.

Household deposits stood at €152 billion at the end of November, and declined significantly, by €1.2 billion, in the month. Outflows in household deposits are typical in November due to Christmas spending by consumers.

On an annual basis, household deposits recorded a net increase of €4.6 billion in November, resulting in an annual growth rate of 3.1 per cent, up from 2.8 per cent in October.

Deposits with agreed maturity increased by €1 billion in November, down slightly from the €1.1 billion inflow in October, and have continued the upward trend in growth recorded since March 2023.

Net lending to non-financial corporations (NFCs) was negative in November, with repayments exceeding drawdowns by €39 million.

In annual terms, there were net repayments of €544 million. NFC lending declined by 1.7 per cent in the year to the end of November, which was slightly less than the decline of 2.1 per cent in the 12 months to the end of October.

Deposits from NFCs stood at €81 billion, while there were net deposit outflows of €567 million during the month, compared with inflows of €3.9 billion in October.

The movement was driven by a €2 billion decline in overnight deposits and repurchases, somewhat offset by a €1.4 billion increase in deposits with agreed maturity. In annual terms, deposits from NFCs have grown by 3.3 per cent.

Total bank lending to Irish resident sectors declined by 1 per cent in November, down from a 0.2 per cent increase in October. Loans to the private sector declined by 0.2 per cent in the year to November, remaining unchanged from October.

Banks’ holdings of deposits from the Irish resident private sector declined again in November, by €2.2 billion, which is a larger decline than was seen in October, where private-sector deposits fell by €70 million.

Annually, the growth rate was -1.2 per cent. Overnight deposits reversed their October increase, declining by €4.9 billion in November, following a €4.1 billion increase in October.

Private-sector deposits with agreed maturity increased by €2.7 billion in November, having declined by €4.2 billion in October.

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