DUBLIN, Sept 30 (Reuters) - Growth in lending to Ireland's private sector slowed to a six-year low in August, with a falling property market and faltering economy also pushing mortgage growth to its weakest level since mid-1987.
Private sector credit growth slowed to an annual rate of 12.9 percent in August, the lowest since July 2002, Central Bank of Ireland data showed on Tuesday. July had marked a previous six-year low at 13.3 percent.
That was well below a 30.3 percent peak hit in June 2006 when the bank warned the then booming property market was fuelling unsustainably high lending growth.
Private sector credit rose by 3.6 billion euros in August, or 0.9 percent, bringing the total outstanding level to 399.9 billion euros.
Growth in residential mortgage lending slowed to an annual rate of 9 percent from 9.6 percent in July, marking the lowest annual rate of increase since mid-1987.
Hit by the global credit crisis and falling house prices after a decade-long property boom, Ireland became the first euro zone economy to enter recession this year.
"Although house prices have been falling for 18 months ... more affordable houses have not yet boosted residential mortgage borrowing," the central bank said.
"In addition, banks ... reported tighter credit standards on loans to households, and attributed this to a rise in their costs of funds and an increased perception of risk," it said.
Earlier on Tuesday the Irish government guaranteed all bank deposits for two years in a bid to help banks access funding on international markets.
(Reporting by Andras Gergely) Keywords: IRELAND ECONOMY/CREDIT

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