Tuesday, March 8, 2011

Personal banking trends in Ireland

The amount of consumer credit outstanding in Ireland at the end of January 2011 was €18,609 million which has declined from €23,711 million a year earlier. Of this €2,722 million (15%) is attributable to personal credit cards held by 2,068,000 personal credit card holders.

Among those with current credit card/store card debts the amount owed varies considerably. One-fifth of households with such debt owe less than €571, a further fifth owe between €571 and €1,400, while 10% of these households owe more than €5,700 on their credit card. Approximately 56% of Irish households had a credit card in 2008 compared to 26.1% in 1995.

According to a recently published by the ESRI study ‘Financial Exclusion and Over-indebtedness in Irish Households’, 20% of Irish households in 2008 did not have a bank current account – that is over 290,000 households. 31% of households do not have any form of credit so the €18,609 million is actually spread among 1,008,000 households the average debt burden with an average burden per household of €18,440 (excluding mortgage debt)

This number without a bank account includes 36% of those ‘at risk of poverty’ and 60% of those ‘living in consistently poor households’. The preference for dealing exclusively in cash is most prevalent among those in the older age group, those with no educational qualifications and those in the bottom income quartile.

The survey also found in the case of households did not have any form of credit. 63% of these did not need to borrow; 22% did not have credit because they could not repay debt; 7% borrowed from family or friends and did not need commercial debt and a further 7% believed that they would not be granted a loan.

Deposits held by Irish households in January 2011 amounted to €93,957 million representing 56% of total Irish private sector deposits.

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