Ulster Bank will join the Credit Review Office, providing the possibility of an external appeal to the owners of small and medium-sized firms who have been refused a loan from the institution.
Ulster Bank, which says it is the first lender to voluntarily open its credit decisions to scrutiny by the CRO, will join the office on a non-statutory basis next month.
The bank said it increased business lending in 2014 and had seen an increase in loan applications from the commercial sector.
Chief executive Jim Brown said Ulster Bank was making €1.9 billion available in business lending this year .
“We are working hard to ensure that viable businesses of all sizes can access the necessary finance to enable them to invest and grow, and we see today’s announcement as an important addition for our customers,” Mr Brown said.
The CRO provides an appeal process for SME and farm clients of participating banks which have had a loan application for up to €3 million refused, reduced or withdrawn where they argue their proposition is viable.
Onerous
Borrowers can also make their case to the CRO if they believe the terms and conditions on existing or new loans are unfairly onerous or have been unreasonably changed to their detriment.
The office was introduced in 2009 after crisis-struck banks curtailed lending to SMEs, greatly increasing pressure on those businesses at a time of acute strain due to recession.
The CRO said in its last quarterly report that 56 per cent of appeals found in favour of borrowers, resulting in €29.7 million in loans being made available to SMEs and farms.
Welcome
Ulster Bank’s decision to join the office was welcomed by Minister for Finance Michael Noonan and by CRO chief John Trethowan.
“Ulster Bank’s inclusion in the CRO’s remit is very important as Ulster Bank is a key lender to SMEs, particularly in the asset finance space and to the farming community,” said Mr Noonan. “Today’s announcement also recognises the contribution that SMEs make to the economy and their importance in securing a sustainable recovery.”
Mr Trethowan said the move was a further demonstration of Ulster Bank’s commitment to the Irish market at a time of concern about the number of lenders serving the SME and farm sectors.
“The Credit Review Office looks forward to building on an already good working relationship with Ulster Bank and ensuring that its viable and potentially viable SME and farm customers are further supported in the provision of access to finance through an independent appeals service,” he said.
Loan applicants who may have total borrowings above €3 million are not excluded from the review process.
