Bank of Ireland approved €1 billion of new loans to small and medium-sized enterprises in the first quarter of 2013, an increase of 25 per cent in the number of loans approved in the first three months of 2012.

The bank yesterday said the increase reflected a pick-up in credit demand from viable Irish SMEs and the bank’s initiatives to grow business-banking operations.

Its director of business banking, Mark Cunningham, said the bank was supporting the key SME funding initiatives launched by the Government in 2012, namely the credit guarantee and microfinance schemes.

“Bank of Ireland continues to be a very key provider of finance to viable SMEs in Ireland. Based on our own analysis of recently released Central Bank of Ireland data for new lending in quarter four 2012, we estimate that we are providing around 50 per cent of all new non-property lending being advanced to SMEs in the Irish economy,” he said.

He said the bank was on track to meet its lending targets for SMEs in 2013, adding that the bank had the capital and liquidity to grow its activity in the SME sector.

However, a recent survey by business lobby group Isme found 52 per cent of SMEs were refused a loan by their banks in the last three months. Of the firms that applied for credit facilities, 65 per cent said the banks were making it more difficult to access finance, with 40 per cent reporting an increase in bank charges.