- Private sector deposits from non EU residents in Irish banks fell 3.5 billion EUR in November 2010 alone.
- Private sector deposits in Irish banks from Irish residents fell 5 billion EUR in November 2010 alone.
- Deposits in Irish banks from financial intermediaries, other than banks, fell 2.6 billion EUR in November 2010 alone.
- Central Bank data suggests deposits are leaving Ireland at a high rate.
DEPOSITS continued to seep from banks last month, while lending to households and businesses declined again, according to the latest data from the Central Bank.
Deposits, traditionally a key source of bank funding, fell by 6.7 per cent in November, according to the Central Bank. Household deposits were 4.5 per cent lower, while business deposits dropped by 14.9 per cent.
Overall, the negative net monthly flow in deposits was €5.2 billion in November, bringing the three-month average to minus €2.1 billion and forcing banks to increase their reliance on funding from the European Central Bank.
What would happen is this withdrawal trend of deposits from Irish banks continues and perhaps accelerated.
??scaremongering
This situation has existed for some time now,
this kind of scaremongering
Where are they moving their deposits to?
Kai.
thier will be a slowdown of withdrawls once a new goverment is elected
The main Irish banks have reported an enormous loss of deposits this year.
Bank of Ireland said it had lost €10bn in a six-week period over August and September, while AIB said it lost €12bn of deposits over the four-and-a-half months to mid-November.
Consumers that are resident outside of the EU continued to take their deposits out of the Irish banks, withdrawing €2.3bn in total in the three months to the end of November.
Following the publication of the monthly Central Bank of Ireland flow statistics for November, that the country's bank ended up borrowing another massive amount of capital from both Europe and the central bank itself, should not be surprising. After all it was in November that Ireland followed Greece into the insolvency abyss, a place where none other than Olli Rehn guarded the gates to feudal hell. However, one much more troubling factor is that the depositor run from Irish banks, a development which many have cited as potentially being the catalyst for the next major step down in the European house of cards tumble, is accelerating. From the report: "Deposits from the Irish resident private sector were 6.7 per cent lower on a year-to-year basis in November 2010. The annual rate of change in deposits from Irish households was minus 4.5 per cent, whereas deposits from Irish NFCs fell by 14.9 per cent on an annual basis in November." What this means simply said, is that as more deposit capital is withdrawn from Irish banks, the more they will need to rely on ECB and ICB funding, the more distressed they will be perceived as, the more capital will be withdrawn and so on... But that is a 2011 story.
Deposits from the Irish resident private sector were 6.7 percent lower on a year-to-year basis in November, separate figures showed.
Allied Irish Banks (ALBK.I), which Ireland effectively nationalised last week, said last month that it had lost 13 billion euros in deposits since the end of June.
Larger rival Bank of Ireland (BKIR.I) shed 10 billion euros of deposits in the third quarter while bancassurer Irish Life & Permanent (IPM.I) said it had suffered a 600 million outflow in the same period.
Some 35 billion euros of the 85 billion euro bailout will be channelled to the country's banks. Around 10 billion euros will be used for immediate capital injections, and a further 25 billion be kept as a back-up in case further injections are needed.
However, more bank black holes might in themselves be rendered insignificant by the emerging spectre of a full-scale bank run. Corporate deposits have been fleeing out the door in recent months. And it is clear that the IMF and EU bailout has not put a stop to the flight. Despite Minister for Finance, Brian Lenihan’s assertions that as an island we will not see deposit flight, how long will it be before there are queues outside the six Irish banks to withdraw nearly €100bn of personal deposits and place the spondoolicks under the mattress or in non-Irish financial institutions? And what happens if the ECB stops shoring up the flight of deposits? And how much longer can we continue with the miracle that is the Central Bank of Ireland creating funding (backed by a State guarantee, natch) to replace fleeing deposits?
The new government are going to have their plate full with issues to address with the Irish banks. There is very little to think that they will bring additional confidence in the Irish banking system because they will have such big issues to deal with.
2011 will bring the closure of Anglo, potentially further losses at Anglo, the closure of INBS, yet more re-capitalisation at AIB, more recapitalisation at BOI, recapitalisation of IL&P and possible nationalisation of BOI. 2011 will see attempts by the ECB to end emergency liquidity, further NAMA financing issues and likely growth in mortgage arrears.
Also, the election campaign might be fought on the "separation of banks and the state". The uncertainty over what they may mean may lead, in itself, to a further loss in confidence.
The flip side is EBS may be sold to Cardinal Capital and the possible sale of BOI to a foreign bank. Foreign ownership is likely to add to confidence in EBS and BOI if this does happen.
FG/Labour will come into government with huge powers over the Irish banking sector. They will have some big decisions to make over the future of the Irish banks and some big "mine fields" to deal with.
If confidence is not rebuilt in Irish banks, which I think can only be done by foreign ownership, and also the segregation of sovereign debt and bank debt/liabilities, then I can only see a further flow of deposits out of Irish banks.
There have been constant rumours of foreign interest in the Irish banks. It would not surprise me if BOI is sold in 2011.
surely one of the reasons depositers were withdrawing thier savings in such a frenzy was down to thier lack of trust in the present goverment , a new goverment will bring a relativley fresh start and besides , eventually , people will have to start putting money back in irish banks if we are to have any kind of a future
Given that most viable banks are going to have to stop paying dividends and conserve capital for the next few years in order to reach Basel III Tier 1 capital requirements, it is hard to see how any CEO could justify taking on an Irish bank to his shareholders. Let alone come up with the capital that would be required to bring BOI into line with Basel III requirements, from it's current state.
The reporting population which is covered in these tables are all credit institutions resident in Ireland. Credit institutions, as defined in Community Law, are undertakings whose business is to receive deposits or other repayable funds from the public and to grant credits for their own account and/or issue means of payment in the form of electronic money. In the Irish case, resident credit institutions comprise licensed banks, building societies and, since January 2009, credit unions as regulated by the Registrar of Credit Unions. A resident office means an office or branch of the reporting institution which is located in ‘the State’ (the Republic of Ireland). These are: institutions incorporated and located in the Republic of Ireland, including subsidiaries of parent companies located outside the Republic of Ireland; and branches of institutions that have their head office outside the Republic of Ireland. Reporting institutions report the data in respect of their resident offices only.
I hate FF, but do most people really think FG will do a better job? They've been absolutely useless in opposition so I can't see them doing much better in power.
The flight from Irish banks has been most pronounced among foreigners, who presumably are less attached to their bailed-out bankers and can easily find other banks that, at least for the moment, appear less apt to go out of business.
Some 20 billion euros ($27 billion) of overseas deposits fled the country in November alone, according to the Central Bank of Ireland. The level of foreign deposits has plunged 28% in the past year and is down 42% from its bubbly peak.
But don't blame just the foreigners. Domestic deposits tumbled by 6.3 billion euros in November, in their steepest decline since August 2009.
All told, the Irish banking system's deposit base has contracted by 15% over the past year -- which isn't making it any easier for taxpayers to keep the deeply troubled banking sector afloat.
Meanwhile, the aid the Irish banks took from the eurosystem more than doubled over the past year, to 97 billion euros from 45 billion in November 2009.
The flight of deposits from troubled Irish banks is an unhappy irony because Ireland was lauded in some quarters in 2008 when it became the first state to guarantee bank deposits. That decision led to a short-lived surge of funds into the Irish banks -- not that the money stuck around for long. Since the late 2008 peak, more than 100 billion euros of overseas deposits have left the Irish banking system.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?