The lead story in today’s Irish Times carries the headline “Overseas deposits at Irish banks increase significantly”. Well, here’s a chart showing non-resident deposits for the three definitions of the Irish banking sector published by the Central Bank: All Banks, Domestic Group (which excludes IFSC banks) and Covered Banks.
How many of you can see the series increasing significantly at the last data point, in the usual sense of the word, meaning a large increase? It appears the headline reflects the following wording provided by Dan O’Brien (who would not have written the headline): “The small but significant increase in deposits …” In other words, Dan is saying that overseas deposits didn’t rise significantly but the small uptick could potentially be a good sign for the future.
Beyond the headline (sub-editor screwups seem to be very common at newspapers) what’s odd about the story is that even though the latest data on overseas and resident deposits don’t show much more than a continuation of recent trends, the rest of the piece treats the release as though something interesting has happened, including the obligatory crowing from Minister Noonan:
The Central Bank statistics on deposits point to a stabilisation of the Irish financial system. Responding to the developments, Minister for Finance Michael Noonan said the “deposit figures illustrate growing national and international confidence in the Irish banking system. It is particularly impressive that the deposit position of the Irish banks has improved at a time of such global uncertainty.”
He described the cash inflows as an “an endorsement of the Government’s restructuring of the banking system. This restructuring has reduced the cost of the banks to the State and has also seen the banks beginning to access international money markets without the benefit of the State guarantee.”
For those interested in actually seeing what’s going on with deposits (yes I know the chart above is rubbish — I don’t know how other people get decent quality graphs up on this site!) here’s a Powerpoint presentation (also here in grimer PDF) with charts for total deposits, non-resident deposits, resident deposits, and private sector resident deposits. In addition to the Total/Domestic/Covered breakdown, I’ve provided charts for an IFSC/Domestic Non-Covered/Covered breakdown.
I surmise from these charts that the non-resident withdrawals have largely tailed off and that the trend for resident deposits in the covered banks remains a downward one.
The Central Bank has continued its excellent work in making more statistical data available with two new releases “Trends in Business Credit and Deposits” and “Trends in Personal Credit and Deposits“. I don’t have time to get into a detailed discussion of these releases but, on a quick look, there appears to be lots of new and interesting information in these releases.
The Central Bank has released the Money and Banking data for the end of April (summary here.)
Looking at the key table 4.2 for the balance sheet of the guaranteed domestic banks, we see some relatively good news. Domestic private sector deposits rose a little in April while the decline in non-resident deposits slowed considerably. This confirms various statements from Michael Noonan and others that the situation with deposits improved after the March 31 stress test announcements. Of course, the situation with falling supplies of credit looks as grim as ever.
The Central Bank has released the Money and Banking statistics for January here.
In a helpful development, the Bank are now publishing statistics for the six banks covered by the Government guarantee (ELG) scheme. The statistics are published both on a gross assets and liabilities basis and also on a consolidated basis, which net out all intra-bank transactions. For example, the gross balance sheets show assets of €623 billion in December. However, once intra-bank transactions are netted out, the consolidated assets are €455 billion.
Unfortunately, the new Table A.4.2. for the covered banks shows a pretty grim story in relation to deposit outflows. In contrast to some reports, deposit outflows from the covered banks in January were about €18.5 billion, about the same as the rate recorded in December.
Update: A contact from the Central Bank has been in touch with me about the calculation above on deposit outflows. As noted above, the Bank are releasing monthly figures on a gross unconsolidated basis and quarterly figures on a consolidated basis. The €18.5 billion figure that I cited is, as usual, from the gross unconsolidated figures. However, I have been informed by the Central Bank that approximately 75% of the decline in deposits reported inn Table A.4.2, is due to intra-group activities in the banks concerned, so that deposit outflows from the system in January were in fact considerably smaller than in December. I’m happy to pass on this as it is useful information. Still, it suggests that the next logical step is for the Bank to release the consolidated balance sheet on a monthly basis.