Irish bank lending recovery is set to falter in the first quarter of the year after the Government confirmed Level 5 lockdown measures will be extended until March 5th, according to stockbroking firm Davy.
Taoiseach Micheál Martin confirmed the news ahead of a Cabinet meeting to sign off on the extension along with new treavel restrictions.
The State’s main banks, including Bank of Ireland and AIB, reported last autumn that lending and other business activity had recovered at a quicker rate than expected.
The extension of the restrictions will impact the recovery seen towards the end of 2020 and will likely hit new lending during Q1 (seasonally the weakest quarter for new lending) given the restrictions on new construction, house buying and a probable conservative approach from businesses in advance of loosening of restrictions, according to Davy.
“However, the group predicts activity levels will not fall to the same extent as Q2 2020, given the fact businesses have adapted their offerings away from bricks and mortar,” the report added.
This morning, Mr Martin spoke to reporters ahead of a Cabinet meeting where Ministers will sign off on the lockdown extension along with a number of new restrictions around travel.
The Taoiseach said it is likely there will be a significant number of Covid-19 patients in hospital even by the end of February.
“That’s the real, clear motivating factor in terms of the measures we’re going to take today, in terms of domestically continuing on the restrictions and seriously restricting travel as well.
“We’re saying to people ‘stay at home’ — that will yield the best results, in the most rapid time.”