German banks' use of ECB funds drops sharply in Jan

FRANKFURT Feb 18 (Reuters) - German banks' use of European Central Bank funding dropped by one-third in January from the previous month after the first opportunity to pay back 3-year loans to the ECB.

Bundesbank data released on Monday showed that German banks owed the central bank 49.5 billion euros ($66.08 billion) at end-January, 23.6 billion less than a month earlier.

The drop in borrowing from the ECB suggests German banks took advantage of an opportunity to repay the 3-year loans, known as LTROs, at the first opportunity to do so on Jan. 30.

The ECB gave banks the ultra-long term loans in two installments roughly a year ago, with euro zone lenders taking more than a trillion euros in cheap cash.

In the first of the twin loans, offered in December 2011, banks took 489 billion euros. In the first opportunity to pay back those loans early, banks returned 137.2 billion euros to the Eurosystem of euro zone central banks on Jan. 30.

($1 = 0.7490 euros) (Reporting by Sakari Suoninen, editing by Paul Carrel)