Firms call for probe into bailed-out banks’ loan books

The Government has been urged to demand that bailed-out banks open their books after a study found Ireland was second only to Greece in terms of refusing loans to small firms.

Business groups said the Central Bank survey backed their long-standing argument that access to finance was being denied to viable but vulnerable firms.

The report revealed that more than 25% of small and medium-sized businesses had been turned down for a loan or overdraft in the six months to March — twice the eurozone average.

Mark Fielding of the Irish Small and Medium Enterprises Association urged the Government to demand full disclosure on lending from bailed-out banks.

“While Irish banks have been recapitalised with enormous fiscal injections, the truth of the matter is the bailed-out banks are not fixed, rescued bankers continue to utter untruths, banking reform is delayed, and banking policy is turning good business bad.

“This present administration must stop their current love affair with the banks, demand changes in bank operations and insist that they partake in a positive way in the recovery.”

The Irish Banking Federation rejected the report and accused the Central Bank of pursuing a populist line. IBF chief executive Pat Farrell said there were fundamental flaws in the report.

Economist Fergal McCann, co-author of the report, rejected claims the study was “spin”.

“The Central Bank is an independent institution and all we have done in this report is place Ireland in a ranking of European countries using two useful and valuable data sources,” he said.

New lending to SMEs amounted to €407m at the start of 2012, a 29.6% drop from three months earlier and down from more than €700m since the end of 2010.

The Irish Hotels Federation said hotels continue to face unjustifiable difficulties in accessing appropriate levels of credit from financial institutions.

Elsewhere, Chambers Ireland raised concerns at the high level of businesses not applying for loans for fear of rejection.

AIB maintained it exceeded its SME lending target of €3bn in 2011 and was 17% ahead of its €3.5bn target for 2012.

In the six months to the end of July, Bank of Ireland had about 33,000 applications for credit and approved almost 27,000 — more than 80%.

Read more:

Businesses back Central Bank report

Credit study contradicts itself, say bankers

No real recovery until vicious cycle of credit cost is broken


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