Household net worth up €11 billion in Q3

Updated: Thursday, 31 Jan 2013 22:10

Household net worth increased by €11 billion, or 2.5%, in the July to September period of 2012, according to figures from the Central Bank.

It was the first marked rise in household net worth since the first quarter of 2008.

At the end of September, the net worth of Irish households stood at nearly €457 billion, or €99,646 per capita.

Total Government liabilities increased substantially during the same period reaching €212 billion, their highest level to date.

Non-financial corporation debt decreased to 202% of GDP.

This represented a decline in debt of €2 billion, or 0.6%, compared with the previous quarter.

Separate figures from the Central Bank today show that loans to Irish households decreased by €372m (3.9%) in December, following a decrease of €264m (3.6%) in November.

Lending for house purchase was 1.6% lower on an annual basis at year end, while lending for consumption and other purposes decreased by 10% over the same period.

Meanwhile, the annual rate of change in Irish private-sector deposits remained positive in December. Private-sector deposits increased by 2.5% over the year, compared with annual rises of 2.2% and 2.4% in November and October respectively.

Deposits from Irish households were 1.1% higher on an annual basis, while deposits from insurance corporations and pension funds and other financial intermediaries rose by 6.9%.

"Although there has been some sign of improvement in the deposits side in the past few months, Ireland remains a long way from where it wants/needs to be as regards credit supply/demand to get the domestic economy moving again," Alan McQuaid, chief economist with Merrion said.

"The lack of available credit will severely hamper the overall recovery prospects for the economy as a whole, and keep the unemployment rate higher than it would otherwise be," he added.

Today's Central Bank data also showed that usage of the ECB's refinancing facilities by the Irish covered banks dropped by €13 billion, or 21%, in just two months to the end of December.

Danke Bank's Owen Callen said the Irish banks' usage of ECB funding has now fallen by 42% from its February 2011 peak - €152.86 billion to €89.16 billion, when ELA facility at the Central Bank is factored in.

He said that of the main ECB refinancing facility, Irish banks now take up just 4.3% of the total, compared to almost 19% at the peak of the Irish banking crisis.

''This figure is now proportionate to the scale of the Irish banking system (in relative euro zone terms) and is no longer looking as dangerously outsized as previously thought,'' he added