Irish Banks 'Free-up' Lending

The Irish Government has welcomed the latest report from the Credit Review Office, which suggests that there has been an improvement in the lending arrangements between the country's two main banks and small businesses.

John Trethowan of the Credit Review Office at a press conference in the Department of Finance on the 'Third Quarterly Report' from the CRO which was published today.

The Credit Review Office was set up by the Government last year to try and improve the ability of small businesses to get loans from the AIB and the Bank of Ireland. The Government also set targets for €3 billion to be loaned by each of the two banks each year for two years.

The office, led by John Trethowan, seeks to "help any viable business to gain access to funding for capital investment in fixed assets, as well as for additional working capital for trading".

According to the Department of Finance some of the main points made in the CRO 'Third Quarterly Report' are the following that the banks have reiterated their commitment to support the domestic SME sector and that the two banks covered under the Government's recapitalisation plan, Allied Irish Banks and Bank of Ireland have honoured commitments made in their lending plans.

It also said that both have completed 170 internal reviews of decisions on loan applications. Of those, 131 were upheld, 27 were reversed and 12 are still being reviewed.

Analysis shows that, although the size of the total lending has contracted, no region or industry has been disproportionately impacted by the reduction since January 2010.

As a result, the Minster's target for new sanctioned lending of €3bn by each of the banks is in line to be achieved by April.

(BMcC/GK)