The annual rate of decline in loans to Irish households increased to 4 percent in February from 3.9 percent in January, with a drop in lending for house purchases accounting for the bulk of the reduction.

Lending to households in the month declined by 355 million euros (296 million pounds) following a net monthly reduction of 690 million euros in January, Ireland's central bank said.

The central bank also said that the annual rate of decline in deposits by the Irish private sector slowed to 6 percent year-on-year in February from 7 percent the previous month.

(Reporting by Lorraine Turner; Editing by Catherine Evans)