Value of mortgage approvals rose by 51.2% month-on-month but fell by 30.2% year-on-year in July

More than half of the number and value of approvals went to FTBs

Banking & Payments Federation Ireland (BPFI) has today published the latest figures from the BPFI Mortgage Approvals Report for July 2020. The following are the key elements:

  • A total of 3,397 mortgages were approved in July 2020 – first-time buyers (FTBs) were approved for 1,883 mortgages (55% of total volume) while mover purchasers accounted for 750 (22%).
  • The number of mortgages approved rose by 50.1% month-on-month and fell by 33.8% compared with the same period last year.
  • Mortgages approved in July 2020 were valued at €811 million – of which FTBs accounted for €462 million (57%) and mover purchasers for €196 million (24%).
  • The value of mortgage approvals rose by 51.2% month-on-month but fell by 30.2% year-on-year.

There were 2,713 purchase mortgage approvals (FTB, mover purchase and residential investment letting), valued at €671 million in July 2020. Purchase mortgage approval activity fell in volume terms by 35.8% year-on-year and decreased in value terms by 33.2% over the same period.

Speaking on the publication of the data, Dr. Ali Ugur, Chief Economist, BPFI said: “With the reopening of the economy we have seen a significant increase in mortgage approval numbers in July compared to the previous month, however on a year on year basis, approval numbers are still down which is not unexpected.”

“On the other hand, when we look at annualised mortgage approval activity, which is a better indicator of the trend, there were 40,090 mortgage approvals in the twelve months ending July 2020, valued at €9,238 million. Annualised mortgage approval activity to end-July 2020 decreased in volume terms by 4.1% compared with the twelve months ending June 2020 and decreased in value terms by 3.7% over the same period.”

The BPFI Mortgage Approval Reports July 2020 can be viewed on the BPFI website here.

 

Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Contact: Lisa Shevlin at lisa.shevlin@bpfi.ie or 087 9770898.

Government financial support will be key for SMEs bearing brunt of Covid-19 – BPFI SME Monitor

Domestic demand to decline by 15% in 2020 – similar to 2009-11

SMEs, especially hospitality, disproportionately affected

Two thirds of accommodation and food SMEs deferred or changed supplier, Revenue, or property-related payments

The latest BPFI SME Monitor warns that Covid-19 will have a significant negative impact on the Irish economy and especially on the SMEs that employ most of the country’s private sector workers.

The report notes that most of the economy shut down between mid-March and mid-May and more than 1.2 million people were receiving state support payments through the Pandemic Unemployment Payments of the Temporary Wage Support Scheme. Both gross domestic product and domestic demand, which is a better measure of activity in Ireland’s open economy, are expected to fall significantly in 2020, with the contraction in domestic demand estimated to be similar to that experienced in the 2009-2011 period.

Commenting on the impact on businesses, Dr. Ali Uğur, Chief Economist, BPFI noted the disproportionate effect of the pandemic on service-industry SMEs:

“Given that the labour-intensive services sectors such as retail, food and beverage, accommodation, tourism and travel are the most affected sectors due to the pandemic, this creates a disproportionate effect on SMEs, evident in the number of business closures, reduced turnover, falling profits and most of all in terms of the numbers of unemployed. Revenue Commissioners data shows that at the end of June 2020, nearly 99% of employers utilising the TWSS were SMEs and 76% of employees on the scheme worked for SMEs.”

While recovery began with the easing of restrictions and reopening of most retail outlets during June, many SMEs still faced significant cash flow issues and Dr Uğur highlighted the importance of government financial supports:

“Given the significant drop in both turnover and income, SMEs seem to have taken a range of measures to manage their cash flows and reduce their costs. In a recent CSO survey, some two-thirds of the responding SMEs in the accommodation and food services sector indicated that they took measures such as deferred or changed payment to suppliers, the Revenue Commissioners or property related expenses.”

“The Irish government has also launched various schemes to support businesses affected by Covid-19…The biggest in potential scale is the yet-to-be launched €2 billion Covid-19 credit guarantee scheme through which the government plans to provide an 80% guarantee against bank losses on qualifying loans to eligible SMEs…Given continued uncertainty around the future outlook due to the pandemic and changing public health measures, it is likely that this scheme will be an important part of the supports provided to SMEs particularly in the third quarter of 2020.”

The BPFI SME Monitor is available on the BPFI website here.

 

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

 Contact: Russell Bryce, Head of Public Policy Engagement and Research, 0851019444 or russell.bryce@bpfi.ie

Contactless spending hits new high of almost €1.9 billion in Q2 2020

More than €63m worth of contactless per day in Q2 2020

The latest figures from Banking & Payments Federation Ireland (BPFI) show that the value of contactless payments reached a new high of almost €1.9 billion in Q2 2020, some 26.6 % higher than in Q2 2019. Spending grew despite volumes dipping to 123 million, the lowest level since Q1 2019, and 1% lower than a year earlier.

Consumers increased their use of contactless payments as cash usage fell and with the contactless limit increasing to €50 during April in response to the COVID-19 crisis, the average payment value jumped from €12.51 in March to €15.57 in June.

Daily contactless spend reached a new monthly high of €27.7 million in June, having dropped as low as €15.7 million in April.

Speaking on the latest figures, Brian Hayes, BPFI Chief Executive said: “Now more than ever consumers want fast, simple and secure payments and this is reflected in today’s figures which show strong Q2 growth in the value of contactless payments. It is likely this growth is in part a result of the increase in the contactless limit to €50, a significant undertaking at the time by BPFI members who worked hard deliver this in collaboration with a number of parties.”

“The increase in contactless payments reflects a wider recovery in the economy, and in the retail and hospitality sectors in particular. We would expect contactless payments to continue to grow in the months ahead in line with consumer spending.”

Contact: Russell Bryce, Head of Public Policy Engagement and Research, 0851019444 or russell.bryce@bpfi.ie

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Source: BPFI. Data is collected from AIB, Avantcard, Bank of Ireland, KBC Bank Ireland, permanent tsb and Ulster Bank. It includes payments by card and mobile wallet such as Apple Pay or Google Pay