BoI extends €1bn in credit so far this year

Bank of Ireland extended €1bn in credit facilities over the first three months of this year, a 25% rise on the same period in 2012.

The bank attributed the higher lending activity to increased demand for credit by SMEs. The pillar banks have €3.5bn in lending targets set by the Government. Bank of Ireland made €3.6bn in loans last year and estimates that it accounted for 50% of all bank lending to SMEs over the first quarter of the year.

Bank of Ireland reported strong demand for credit across most sectors, and manufacturing, agriculture, and hospitality, in particular. However, there was a continued fall-off in demand for credit in the construction/real estate sector.

“Looking at other trends with SME customers, there is obviously a time lag between the bank’s new and increased lending facilities being put in place and their being utilised by customers,” said Mark Cunningham, the bank’s director of business banking.

“This may be partially attributable to businesses sensibly coming for finance earlier in their investment planning stage. In 2013 we are seeing some signs of increased planning by businesses for future investment on the back of increased business confidence.

“In the micro-finance sector — borrowing requirements of less than €5,000 — activity was strong in the first quarter. These businesses tend to be in the services, farming, and retail segments, particularly sole traders.

“A significant percentage of applications are for working capital.”