Rise in credit debt at 4-year high

The annual increase in credit card debt hit nearly 20 per cent in March, its highest in four years, according to Central Bank figures released today.

The annual increase in credit card debt reached nearly 20 per cent in March, its highest rate since April 2003, according to the bulletin.

"Outstanding indebtedness, which usually declines in March, showed an increase this year, leading to the strong annual growth in credit card debt," the bank reported.

The annual increase in private-sector credit (PSC) growth continued its downward trend, however, and fell to its lowest in three years in March.

In its monthly statistics, published today, the Central Bank said the adjusted annual growth rate in March was 23.2 per cent, compared to 24.8 per cent in February.

The bank said the underlying demand for credit remained strong and that the rise in PSC would have been close to €5 billion had it not been for a large asset-backed securitisation of residential mortgages.

Such mortgages are removed from credit institutions' books and so are excluded from total PSC, the Central Bank said.

The growth rate in non-mortgage credit has remained above 30 per cent since June 2006. The adjusted annual growth rate of 30.7 per cent in March was almost unchanged from February's rate of 30.8 per cent, the bank said.

Lending to the real estate and construction sectors is driving the strong growth rate and is approaching half the total outstanding non-mortgage credit.

The rate of increase in outstanding residential mortgages eased again in March, and was nearly a full percentage point lower than in February.

The adjusted annual growth rate of residential mortgages was 22 per cent in March, from a revised 22.9 per cent in February. This is the lowest growth rate since November 2002.

Total lending by credit institutions in Ireland to non-Government Irish residents increased by €2.2 billion, or 0.7 per cent, in March to €328.3 billion.