Banks claim SME lending ‘on target’ despite Credit Review Office criticism

Bank of Ireland and AIB have said they remain on schedule to meet SME lending targets, despite fresh criticism from the Credit Review Office.

Yesterday’s ninth quarterly lending review from the CRO detailed the overturning of 14 bank loan refusals between July and the end of September, resulting in nearly €1.2m worth of loans being released to credit-hungry firms.

The office claimed the banks weren’t doing enough to assist SME access to funding, adding that lending policy has tightened and that it could be a challenge for the banks to meet their lending targets.

The banks met last year’s Government-imposed SME lending targets of €3bn, but must lend a further €3.5bn to the sector this year and €4bn each next year.

AIB said it expects to exceed this year’s target. “It’s important to address the negative perception that banks are not lending, which in itself is a factor in discouraging potential borrowers from seeking credit,” the bank said.

Likewise, Bank of Ireland yesterday stressed that it will meet this year’s target — saying it is committed to growing its business.

“This growth can only be achieved by continuing to make credit available to sustainable and viable businesses that generate sufficient returns necessary to meet all commitments,” said Mark Cunningham, director of business banking.

Bank of Ireland claims to have approved nearly 30,000 of 37,000 lending applications from SME and agri customers this year.

Meanwhile, Shane McEntee, the junior agriculture minister, has urged small firms to approach the CRO if they are unhappy with their bank’s decision not to lend.

“People have a right to appeal to the CRO and they should not allow any misplaced fear of a local or regional bank manager to stop them doing so,” he said.