Banks will return 18.90 billion euros (£15.79 billion) in crisis loans to the European Central Bank next week, a much larger sum than expected that will keep up the drain of extra cash out of the euro zone financial system.
The amount banks will repay on March 26 is more than this week's repayments of 10.075 billion euros and is also far above the 7 billion forecast in a Reuters poll.
To help lenders ride out funding constraints, the ECB lent banks more than one trillion euros in three-year loans during the euro zone's debt crisis, in December 2011 and February 2012. Since January of last year, banks have repaid more than half of those loans.
The speed with which banks have been repaying the three-year loans has picked up over recent weeks again as confidence returns and banks start to rely less on central bank funding.
Banks seem keen to offload their LTROs to shape up their balance sheets ahead of the ECB's forthcoming asset review.
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 122 billion euros on Friday. Excess liquidity peaked in early 2012 at around 800 billion euros.
On Friday, the ECB said 12 banks would repay 6.411 billion euros from the first LTRO on March 26, and 15 banks would pay back 12.498 billion from the second LTRO.
(Reporting by Frankfurt newsroom)(Reuters)
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