The latest figures from the Central Bank show that falls in lending to consumers and businesses accelerated last month.
Lending to consumers fell at an annual rate of 4.8%, after a 4.6% annual drop in April. Mortgage lending was down 2.1% in May compared with the same month last year, while lending for other purposes fell by 13.6%.
The fall in lending to businesses also gathered pace, down 2.6% in the 12 months to May, following a 2.3% drop in April. Business loans with terms of between one and five years are showing the biggest falls, according to the Central Bank.
The figures also show an 8.7% annual drop in private sector deposits - which includes deposits from households, businesses, financial institutions and pension funds - in May. The rate of decline in deposits has been slowing in recent months. They dropped by 9.1% in the year to April.
Deposits had picked up slightly during April, but last month there was a €752m outflow of deposits, mostly due to a fall in household deposits.
The amount which has been borrowed by financial institutions from the Central Bank as part of the euro system fell by €3.8 billion in May to €102.3 billion, with the domestic banks accounting for €74.4 billion of this.
