merrion street

Headline deposits at covered banks remained stable in October, growing by c.€1.5bn (c.1.0%) during the month to €155 billion, their highest level since January 2011. The growth in deposits during October was largely due to Corporate and Retail deposits in Ireland, offset by a small decline in deposits by NBFI’s. On a constant currency basis, deposits were €1.7bn higher month on month in October. The trend in deposit volumes in October may reflect an element of seasonality as flows are typically stronger on the back of tax planning by corporates and individuals in advance of the 31 October tax deadline.

Notwithstanding this, the cumulative growth since the start of the year remains strong with headline deposits up c.€7.8bn (5.3%) or c.€6.1bn on a constant currency basis. The year-on-year increase in October is €10.9bn or 7.6%, although the pace of year on year increase has moderated somewhat.

Covered Banks usage of Eurosystem funding

The usage of Eurosystem funding by AIB, BOI and PTSB increased by c.€2.1bn during October 2012 to €62 billion , reflecting a technical switching of collateral between monetary financing operations. However, the downward trend in borrowing from the Eurosystem has continued in early November, reinforced by balance sheet restructuring and deposit gathering, and was €57 billion on 7th November .

Eurosystem funding to Covered Banks peaked at c.€93bn in January 2011 and has since reduced by 39% or €36bn to €57bn. 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.

Next publication date

20/12/2012 November Deposit note

24/01/2013* December Deposit note (* Please note revised date due to year end reporting.)

14/02/2013 January Deposit note

14/03/2013 February Deposit note