LENDING TO SMEs:SMALL AND medium-sized enterprise (SME) customers have drawn down €1.2 billion in credit from Bank of Ireland in the first half of the year out of €1.7 billion approved, according to the bank.
The bank repeated its commitment to make at least €3 billion in credit available to SME customers in both 2010 and 2011 as part of the €12 billion being committed to SMEs from the State’s two biggest banks under Government plans.
Bank of Ireland said it reviewed about 4,500 credit applications a month from new and existing SME customers and approved about 80 per cent of them.
“We have approved €1.7 billion in new/increased lending to SMEs to the end of June this year and we anticipate that this figure will increase over the second half of the year,” Mark Cunningham, head of Bank of Ireland’s business banking division, said.
The Credit Review Office, an independent office set up by the Government to which businesses can appeal credit refusals, assessed seven applications declined by Bank of Ireland. It disputed two refusals and asked the bank to reconsider providing loans to these customers.
The office, led by former National Irish Bank executive John Trethowan, upheld two of the bank’s refusals and said more work was needed by the bank and the borrower in another case.
The two remaining cases were still being reviewed, according to the office’s first quarterly report.
Mr Trethowan also assessed Bank of Ireland’s internal review of credit refusals and found it upheld 30 refusals and overturned or sanctioned with conditions five more cases from April to June.
Mr Cunningham said it was in the bank’s interest to increase SME lending to earn a return for its shareholders, which includes the State, a 36 per cent shareholder. He added that if the review office created confidence in credit approvals, it would benefit the overall system.
