Lending to the private sector remained negative last month as headline private sector credit fell by €3.7 billion, or 2.2 per cent, according to new figures from the Central Bank.
The value of outstanding residential mortgage loans also fell by €71 million in July, the fourth consecutive month of decline, as the amount repaid on existing mortgages exceeded new lending.
In a note released today bank said the fall in private sector credit was due to “write-downs of loans, increased debt provisions and other valuation effects.”
A reduction of €2.1 billion in lending to businesses was the main reason for the fall lending to the private sector last month.
July's decline in lending compares to a €1.4 billion (0.7 per cent) reduction in June which was the first annual fall since the Central Bank started recording it in 1993. July was the fifth consecutive month private sector
Non mortgage credit was 0.2 per cent lower last month compared with July 2008.
Repayment of credit card balances exceeded new spending last month as has been the case in every month but one so far this year.