The annual growth rate in lending by Irish credit institutions has slowed, according to the Central Bank's monthly figures.
The Central Bank said growth in private-sector credit (PSC) fell by 2 per cent in December to 25.9 per cent, from a level of 27.9 per cent in November.
But it warned that while it would be tempting to associate this easing trend in credit growth with the rise in interest rates since December 2005, a substantial part related to an increase in "securitised residential mortgages" where Irish lenders sell off loans to foreign institutions.
The Central Bank said there was an increase in securitised residential mortgages of some €8 billion in 2006 and since these mortgages are removed from credit institutions books they are excluded from total PSC.
If these securitisations had not occurred, PSC growth at end-2006 would have been very close to the end-2005 rate of 28.8 per cent, the bank said.
Lending by credit institutions recorded an increase of €59 billion in 2006, the figures showed.
Annual growth in private-sector credit (PSC) accelerated during the first half of the year, with a record adjusted growth rate being set in June at 30.3 per cent.
But since then the annual growth has slowed to the December level of 25.9 per cent.
The Central Bank said the adjusted annual growth rate of non-mortgage credit reaccelerated during 2006, and peaked in June at 32.6 per cent, the highest rate since March 2000.
The adjusted annual growth rate was 31.7 per cent in December. "This rapid expansion of non-mortgage credit was driven by exceptionally strong lending to the real estate and construction sectors," it said.
It also noted that credit-card indebtedness rose in December, with new spending of €1.2 billion, which was 15.8 per cent higher than in December 2005. This led to an annual growth rate of 18.8 per cent in outstanding indebtedness.