March 7, 2014 / 11:39 AM / 3 years ago

Banks to return 11.4 bln eur of crisis loans to ECB next week

FRANKFURT, March 7 (Reuters) - Banks will return 11.401
billion euros ($15.78 billion) in crisis loans to the European
Central Bank next week, more than six times than the amount that
was expected, accelerating the drain of extra cash out of the
euro zone financial system.
    The amount banks will repay on March 12 beat this week's
repayments of 3.012 billion euros and is more than the 2.1
billion forecast in a Reuters poll. 
    It is the largest repayment since the end of last year, when
banks returned large chunks of the long-term loans they took
from the ECB in late 2011 and early 2012 to ride out a credit
crunch. 
    Many banks used the cheap funds to buy higher-yielding
government debt and next week's hefty repayment could be "mainly
related to the expiring of some short-dated Italian bonds in
early March", Annalisa Piazza, analyst at Newedge Strategy,
said.
    The euro hit a 2014 high of 1.3892 after the release of the
repayment figures. 
    The year-end marked a cut-off point for an ECB snapshot of
banks' balance sheets that it will assess this year and in the
run up to the so-called asset-quality review, banks shed assets,
such as loans.
    The speed with which banks have been repaying the three-year
loans has picked up over recent weeks again as confidence
returned and banks began to rely less on central bank funding.  
    With banks repaying ECB crisis loans, the amount of excess
liquidity, the amount of money banks have beyond
what they need for their day-to-day operations, is falling. 
    It stood at 112 billion euros on Friday, the lowest level
since late 2011, just before the ECB flooded the market with its
cheap loans. Excess liquidity peaked in early 2012 at around 800
billion euros. 
    ECB Executive Board member Benoit Coeure said last month
market participants were learning to adapt to an environment of
less excess liquidity, "learning their way back to normality".
    On Friday, the ECB said six banks would repay 3.133 billion
euros from the first LTRO on March 12, and eight banks would pay
back 8.268 billion from the second LTRO.
    Announcements on details of LTRO early repayments (bln euro)
    First LTRO (December 2011)  Second LTRO (February 2012) 
 
    Jan. 25, 2013     137.1591                   
    Feb. 1, 2013        3.4840   
    Feb. 8, 2013        4.9925   
    Feb. 15, 2013       3.7900   
    Feb. 22, 2013       1.7440            61.092     
    March 1, 2013       4.1760             8.319     
    March 8, 2013       1.3360             2.894     
    March 15, 2013      0.385              6.432     
    March 22, 2013      1.565              0.371     
    March 28, 2013      3.845              3.160    
    April 5, 2013       4.092              3.972    
    April 12, 2013      6.555              4.238   
    April 19, 2013      8.874              2.068   
    April 26, 2013      1.661              0.615  
    May 3, 2013         0.008              0.608 
    May 10, 2013        1.205              5.152 
    May 17, 2013        1.020              0.104 
    May 24, 2013        6.208              1.915
    May 31, 2013        2.810              0.271
    June 7, 2013        2.800              0.130
    June 14, 2013       3.008              0.180
    June 21, 2013       5.030              0.208
    June 28, 2013       2.025           0.035
    July 5, 2013        0                  2.095
    July 12, 2013       0.513              0.702
    July 19, 2013       2.182              0.200
    July 26, 2013        1.064              0.451 
    Aug. 2, 2013        1.800              0.333
    Aug. 9, 2013        0.516              0.200
    Aug. 16, 2013       0.204              0.450
    Aug. 23, 2013       0.100              0.205
    Aug. 30, 2013       0.100              4.545
    Sept. 6, 2013       3.705              2.200
    Sept. 13, 2013      0.741              2.375
    Sept. 20, 2013      2.650              5.260
    Sept. 27, 2013      1.535              1.622
    Oct. 4, 2013        4.610              3.065
    Oct. 11, 2013       0.597              0.250
    Oct. 18, 2013       0.105           5.094
    Oct. 25, 2013       1.445              0.311
    Nov. 1, 2013        5.288              5.363
    Nov. 8, 2013        2.910              2.857
    Nov. 15, 2013        3.155              0.431
    Nov. 22, 2013        2.841              5.0815
    Nov. 29, 2013       5.105              2.130
    Dec. 6, 2013        3.138              3.932
    Dec. 13, 2013       3.320             19.330
    Dec. 20, 2013         4.050          16.675
    Jan. 10, 2014       0.980              1.586
    Jan. 17, 2014       0.632              0.359
    Jan. 24, 2014       3.4969             0.202
    Jan. 31, 2014       0.250              0.218
    Feb. 7, 2014        0.525              1.250
    Feb. 14, 2014       0.790              0.230
    Feb. 21, 2014       2.500              0.345
    Feb. 28, 2014       0.510              2.502
    March 7, 2014       3.133              8.268
    ===============================================   
    Amount outstanding as of March 6   
                      198.232            329.804

($1 = 0.7225 euros)

 (Reporting by Frankfurt newsroom)

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