Revenue reveal deposits flight over debt crisis

Deposits placed overseas by Irish investors doubled during 2011 as the euro zone sovereign debt crisis rumbled on and savers acted to protect funds, figures from the Revenue Commissioners show.

In 2011, some €419 million was placed on deposit in overseas banks by 1,823 individuals or couples, up from €235 million by 901 investors in 2010, as savers and investors looked to diversify their holdings away from Irish banks and the euro currency. In 2008, just €89 million was held in foreign bank accounts, according to information compiled by the Revenue from income tax filings.

Taxpayers filing on a self-assessed basis must disclose data on foreign bank accounts, as interest earned is subject to income tax, rather than deposit interest retention tax, as is the case with domestic deposits. The figures above do not include PAYE taxpayers, who may have declared their foreign bank holdings through a local tax office.

Since 2005, the amount of disclosed foreign bank deposits has jumped fivefold from €65 million to € 419 million. And, while the number of individuals or couples investing abroad was stable up until 2010, it soared in 2011.

The Central Bank also disclosed that Irish-based businesses grew their deposits during the third quarter of 2013, up by 1.2 per cent or by €1.1 billion. On an annual basis, deposits jumped by 19.2 per cent, but this is largely due to transactions in the financial intermediation sector.

Once this is excluded, deposits grew by 7.9 per cent. The largest decline in deposits occurred in the information and communication sector, falling by €159 million.

The bank’s data also indicated a decline in lending to small and medium-sized enterprises (SMEs), which fell by 4.8 per cent over the year to end-September, back to €25.1 billion. But the rate of decline has slowed. On a quarterly basis, lending to SMEs fell by 0.2 per cent, the smallest fall since the data series was introduced in the first quarter of 2010. New lending to SMEs amounted to €399 million during the third quarter.