Banks repay ECB 12.5 bln euros of crisis loans

Fri Mar 1, 2013 11:14am GMT

FRANKFURT, March 1 (Reuters) - Banks will next week repay
the European Central Bank 12.495 billion euros ($16.34 billion)
of two 3-year loans they took a year ago, a drop in the payback
rate that shows they prefer to hold surplus cash in case
financial markets clog up again.
    The ECB said on Friday 66 banks had decided to repay funds
from the loans on March 6, with 4.176 billion euros repaid from
the first one and 8.319 billion from the second.
    The amounts were slightly above a Reuters poll on Monday,
which estimated banks would return 3 billion euros of the first
round of cheap loans and 5 billion in of the second. The loans
are known as LTROs (long-term refinancing operations).
    The ECB lent banks a total of more than 1 trillion euros in
the twin 3-year, ultra-cheap lending operations in December 2011
and February 2012 - a ploy that ECB President Mario Draghi said
"avoided a major, major credit crunch". 
    Banks took 489 billion euros in the first LTRO and 530
billion in the second.
    In January, banks opted to repay the ECB 137.2 billion euros
of the first of the twin loans at the first opportunity to so,
handing more cash back early than expected, which led to higher
market interest rates.
    In the first opportunity to pay back funds from the second
LTRO, banks returned 61.1 billion euros to the ECB.
    
    Announcements on details of LTRO early repayments (bln euro)
    First LTRO (Dec. 2011)            Second LTRO (Feb. 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        61.09235
    March 1 2013      4.1760         8.31873
    
($1 = 0.7649 euros)

 (Reporting by Sakari Suoninen)
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