Lending to small and medium sized enterprises (SMEs) fell by 4.8 per cent over the year to end-September, dropping back to € 25.1 billion. However, the rate of decline has slowed, according to new data from the Central Bank.
On a quarterly basis, lending to SMEs fell by 0.2 per cent, the smallest decline since the data series was introduced in the first quarter of 2010.
New lending to SMEs amounted to € 399 million during the third quarter, with the agriculture sector accounting for the largest share (€119 million), followed by wholesale/retail trade and repairs (€ 90 million).
Property-related SME lending fell by 0.5 per cent, or € 163 million during the third quarter, representing the smallest decline since end-December 2011.
Irish SMEs accounted for 37.3 per cent of all credit advanced to businesses. Lending to all businesses fell by 3.9 per cent over the year to end-September, and by 1 per cent over the quarter, down to € 37.7 billion. Again however, the pace of decline has slowed, down from an annual rate of 5.9 per cent as of end-September 2012.
Property lending to businesses fell again, down by 0.8 per cent in the third quarter of 2013, while declines were also reported by the wholesale/retail sector, and the hotels and restaurant sector, which experienced annual declines in lending of 6.7 per cent and 5.5 per cent, respectively.
The total amount of credit outstanding to Irish businesses stood at €184.4 billion as of the end of September, with more than half of this accounted for by the financial intermediation sector, including securitisation vehicles.
Irish based businesses grew their deposits during the third quarter, up by 1.2 per cent or by €1.1 billion. On an annual basis, deposits jumped by 19.2 per cent, although this is largely due to transactions in the financial intermediation sector.
Once this is excluded, deposits grew by 7.9 per cent on an annual basis. The largest decrease in deposits was reported in the information and communication sector, with deposits falling by €159 million.
