Dominance of main banks ‘unhealthy’

THE lack of competition between the two major banks in the small and medium business market has helped swell their profits but at the same time put many small companies at a serious competitive disadvantage, a study has claimed.

The study, carried out on behalf of the small and medium business organisation ISME, shows that Bank of Ireland and AIB control 77% of the small and medium enterprise market. Such a dominance of the market is unhealthy from a competition perspective.

ISME also points to what it describes as the “extraordinary high level” of bank profitability, notwithstanding the €100 million banking levy introduced in the last Budget. Irish bank profit, according to the study, was among the highest in Europe.