merrion street

Deposits at covered banks remained stable though August at €154 billion demonstrating continued depositor confidence in the strength of the banking system following its successful recapitalisation last year.

Headline deposits fell during August by c.€0.3bn (-0.2%) due to exchange rate movements. Adjusting for exchange rate movements, underlying deposit volumes continued to grow in August by an estimated €0.3bn.

Since the start of the year Deposit in the Irish covered banks have increase by c.€7.0bn and have increased by €14.0bn to €154.1bn since reaching a low-point of c.€140bn in July 2011. Cumulatively, on a constant currency basis deposit volumes have increased by €5.1bn since the start of the year.

Covered Banks usage of Eurosystem funding

The usage of Eurosystem funding by AIB, BOI and ptsb reduced by a further €0.4bn in August 2012, reflecting the continued progress that is being achieved by the Banks in terms of deleveraging and deposit gathering.

Eurosystem funding to Covered Banks peaked at c.€93bn in January 2011 and has since reduced by 34% or €32bn to €61bn. While there is still much work to do, the continued decline in ECB borrowing demonstrates the progress being made in restructuring the domestic banking system.

Ireland’s share of total Eurosystem funding has declined steadily from a peak in December 2010. The Irish banking system now accounts for c.5.0% of total Eurosystem funding, down from a peak of c.18.1%.

Date of next publication

18/10/2012 September Deposit note

The attached note has been published on the Banking Policy website http://banking.finance.gov.ie/presentations-and-latest-documents/