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Irish banks' reliance on emergency funding eases in August

Updated: 18:37, Friday, 14 September 2012
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New Central Bank figures show that Irish banks' reliance on emergency funding fell in August.
Central Bank figures show that Irish mortgage holders paying less interest than euro zone counterparts
Central Bank figures show that Irish mortgage holders paying less interest than euro zone counterparts

The Central Bank figures show that outstanding loans fell to €120 billion from €122 billion in July.

The Central Bank figures show that banks had €79.1 billion in outstanding loans from the European Central Bank as of the end of August, down from €80 billion in July.

Emergency loans from the Central Bank declined to €40.8 billion from €41.6 billion.

Irish banks are heavily dependent on loans from the ECB and the Central Bank to run their operations. Under the EU/IMF programme they must shrink their balance sheets to ease that reliance, which peaked at €187 billion in February 2011.

Seperate Central Bank figures show that interest rates on outstanding mortgage loans fell by 12 basis points at the end of July to stand at 2.86%.

This compares to an euro average of 3.72% and the Central Bank said the lower Irish rate is due to the fact that Ireland has a higher proportion of tracker and other variable rate mortgage products than its euro zone counterparts.

The figures also show that interest rates on deposits fell slightly in July to stand at 3.6%. Interest rates on deposits had increased significantly in 2011 and the early part of 2012 which reflected efforts by Irish banks to secure additional funding by offering ''attractive rates'' on longer term deposit rates.