Marginal percentage fall in private sector credit

The 1.2pc decline was mainly due to write-downs of existing credit arrangements and increased provisions for bad and doubtful debts. It indicates a continuation of the slowdown in underlying credit growth recorded since the autumn of 2008, according to the Central Bank. The underlying stock of credit to the private sector was relatively unchanged on an annual basis.

Lending to the non-property, non-financial corporate sectors fell during the second quarter by 6.2pc, or €3.3 billion, which continues a deteriorating trend since the third quarter last year. Credit outstanding to these sectors decreased by 7.7pc in the year to the end of the second quarter 2009.

Meanwhile, lending to the personal sector declined by €563 million during the period under review. Underlying this was a fall of €368 million in non-mortgage credit, while lending for mortgages decreased by €194 million.