BoI surpasses €3.5bn lending target for SMEs

Bank of Ireland says it has lent in excess of its €3.5bn lending target to the small and medium enterprise sector.

The figures are for new and increased credit facilities provided to businesses and farmers throughout the country, and do not include a number of restructured loans.

Director of business banking at BoI, Mark Cunningham, said the €3.5bn represents a 16% increase in approvals for the year to date when compared with 2011, which is as a result of increased demand from several sectors in the Irish economy.

“We are pleased to have exceeded our SME lending target for 2012 and remain focussed on our strategic objective of increasing our lending to Irish businesses and farmers,” said Mr Cunningham.

“We have seen particular increases in demand from customers in the healthcare, manufacturing, and hospitality sectors, while agri lending has also remained strong. Increased demand for asset and commercial loan finance has also been a feature.”

BoI said lending was up across the country, but that Dublin had performed particularly well, with lending up more than a quarter on last year.

“Lending to Dublin businesses was up by 27% compared to last year,” said Mr Cunningham. “With over 40% of businesses located in the capital this indicates that confidence is slowly returning, as evidenced by the growth we have been seeing in credit demand from viable businesses in the second half of this year.”

It was also revealed in an interview in the Financial Times yesterday that BoI is being hampered by the authorities in its attempts to exit the Government’s eligible liabilities guarantee or bank guarantee, according to chief executive Richie Boucher.

“Bank of Ireland is ready to come off the guarantee and we were prepared for coming off on Dec 31,” said Mr Boucher.

He added that “the delay in timing is frustrating for the bank and is something we are keeping a very close eye on and we are having dialogue with the authorities on”.

BoI has to pay the Government for the guarantee facility, and believes that the cost outweighs any benefits at this stage.

The bank is also ahead of schedule in its 1,000 to 1,500 voluntary redundancies, which have been found faster than had been predicted.

General secretary of the IBOA, Larry Broderick, said that the cuts were taking place “quicker than expected”.