Lending to businesses fell again in May, with the rate of decline accelerating further during the month, data from the Central Bank showed today.
Credit to non-financial corporations (NFCs) fell by 3.4 per cent in the year to the end of May 2010. This follows revised declines of 3.3 per cent in March and 2.9 per cent in April.
The stock of credit outstanding to institutions in Ireland was €128.5 billion at the end of May, a fall from €134.2 billion at the end of April as the transfer of loans to the National Asset Management Agency took effect. The decline was also attributed to an increase in impairment provisions.
Loans with a book value of about €5.2 billion at the end of April were transferred from Irish resident credit institutions to Nama during the month. A further €1.5 billion of loans issued by non-resident offices of the participating credit institutions were also transferred.
Household credit, which includes residential mortgages and credit card debt, also fell, declining 1.5 per cent in the year to May 2010. Excluding valuation effects and the impact of Nama transfers, total household credit fell 0.2 per cent during the month,
Repayments on personal credit cards exceeded new spending by €56 million, with personal credit card indebtedness falling to -0.4 per cent in May. The Central Bank said the number of personal credit cards has declined by more than 2 per cent over the 12-month period, leading to a rise in the average outstanding credit card debt of 1.8 per cent.
Outstanding residential mortgage lending was down 1.8 per cent to €145.8 billion during May, a decline of €352 million.
