On behalf of the Bank of Ireland, I thank the Chairman, Vice Chairman and members of the joint committee for the opportunity they have given to me, Richie Boucher and Des Crowley to meet with them today. We sent the committee a submission in advance but if I may I will touch on some of the key points in that submission and bring members up to date on the current position in Bank of Ireland. In addition to addressing the question posed in the committee's letter of invitation, I will also provide some detail on our business activity in support of personal and business customers at this difficult time, a subject that I know is of considerable interest and concern to public representatives.
On context, Bank of Ireland enjoys very good relations with the vast majority of its customers. This is a consequence of building and developing relationships over many years, and supporting our customers appropriately in these difficult times will mean we can all benefit from better economic times that will arise in future.
Bank of Ireland sincerely appreciates the significant support of the Irish Government and taxpayer in stabilising the financial sector in Ireland throughout this turbulent period. We are also acutely aware of the depth of public feeling about the banks at this time. We are working hard to learn the lessons from the past and to rebuild damaged relationships with all of our stakeholders. We know we have much to do to repair these relationships but the committee can be assured we are determined to do it.
Our current business priorities are, first, to support our customers responsibly through these difficult times; second, to fund our balance sheet; third, to strengthen our capital; fourth, to manage actively our credit risks; and, fifth, to manage rigorously our costs. I believe that by successfully dealing with these priorities we will stabilise the bank, rebuild customer trust and make a very strong contribution to this economy.
One of our key current priorities is engagement with the National Asset Management Agency. We are committed to doing this in a constructive manner with a view to achieving the best outcome for all parties concerned. NAMA will support a functioning banking system and will aid economic recovery in Ireland through providing increased certainty on asset quality and impairment charges, reducing risk weighted assets on the banks' balance sheets, improving liquidity and underpinning credit availability in the country.
With regard to pricing, the committee has raised a specific query regarding interest pricing before and after the transfer of assets to NAMA. In our interim statement for the six months to 30 September last, which we issued on 4 November, Bank of Ireland advised the market that its net interest margin had fallen by ten basis points compared to the prior year period, that is, it has fallen to 1.61%, and that this net interest margin was likely to decline further by year end. This primarily reflected intense competition for deposits and the cost of extending the term of the bank's wholesale funding, notwithstanding a fall in the quantum of this wholesale funding.
In recent months, that is, since approximately July of this year, easing general international conditions and improved international perceptions of Irish Government risk and of Irish banks' risk, partially reflecting the market's anticipation of NAMA, has given Bank of Ireland improved access to international debt markets. Bank of Ireland has extended the maturity profile of its funding, including undertaking issuances which do not rely on the Government guarantee. This has increased the market's confidence that Bank of Ireland can come off the Government guarantee over time.
We anticipate that the liquidity which NAMA will provide to the Irish banking system as a whole should improve the funding position of banks and the cost of short-term money to banks, albeit slightly offset in cost-benefit terms for Bank of Ireland by the desire of Bank of Ireland to continue to extend the maturity of its debt and undertake non-Government guaranteed issuances into the future.
I emphasise that despite the difficult liquidity conditions of earlier this year, Bank of Ireland has not restricted the availability of funding to its Irish businesses and has provided very competitively priced products, particularly for owner occupier mortgages and small and medium sized business customers. This has been made possible by the difficult decisions Bank of Ireland has made and implemented to close for new business and to place into rundown certain international businesses which have combined loan assets of €37 billion.
Bank of Ireland has reaffirmed that its strategic bias is to Ireland and that it wishes to retain its existing customers and win new customers. This remains the case going forward. This strategic imperative can be achieved only by making credit available to our customers, with that credit being competitively priced and supported by efficient good service and a strong supporting infrastructure. We reiterate that Bank of Ireland has made credit available to its Irish customers at very competitive pricing during the difficult liquidity conditions of earlier this year and will continue to do so.
On the progress we are making against our business priorities, with the support of the Irish State and taxpayers, our customers, our investors and staff, we have made significant progress across each of the priorities I set out earlier. The first of these is the issue of supporting our customers. Bank of Ireland has a significant stake in, and dependency on, the Irish economy. Our participation in the market here, particularly in the SME and mortgage markets, is critical to our future and we remain firmly committed to supporting our current and future customers through these difficult and challenging times. It is and has been our policy to channel the majority of the group's available lending capacity to our Irish consumer, SME and corporate banking franchises. During the first nine months of 2009, over €3.6 billion in new SME and mortgage lending was drawn down by Bank of Ireland customers.
With respect to our commitment to SMEs, we continue to promote the availability of both advice and credit, reinforcing to customers and potential customers the message that we remain open for business and committed to supporting business recovery. This year we have run a number of nationwide campaigns to show our support for the SME sector, including a National Enterprise Week in May and a "show your business" week in October. These have attracted very positive feedback from the participating companies. I am sure many Members of the Dáil and Seanad will be aware of these events taking place in their local constituencies and areas. We are running a further "show your business" week in December where businesses will have the opportunity to promote their activities in our local branches. I will ensure that details are provided to public representatives, and we would welcome them to come along and see for themselves the many vibrant businesses we are supporting.
Nonetheless, SMEs continue to face significant trading difficulties. The third quarterly trends survey for the year undertaken by the Irish Small and Medium Enterprises Association, ISME, suggests that the business environment remains challenging. The most significant issue faced by businesses in the current climate revolves around having sufficient cash flow to sustain their businesses. Bank of Ireland's commitment to the SME sector remains strong. Our focus is on continued support for customers through new lending, overdraft sanctions and renewals.
Through our 800 specialised business bankers in 248 full-time branches and 29 other locations, we are supporting well managed and viable businesses in the following ways. We have advanced €2.1 billion in branch lending to SMEs in the first nine months of the year. Our working capital facilities and limits to SMEs are up 18% since last year, with utilisation at approximately 53%. We review approximately 6,000 loan applications each month for SMEs, of which almost 80% are approved. We have financed more than 1,000 start-up and early stage businesses this year. More than 15,000 new business current accounts have been opened. We launched a number of specific business and environmental funds in the past year totalling €550 million in value, and moneys from these funds remain available for drawdown by SMEs. We have arranged a €100 million European investment bank facility to lend on to SMEs for specified investment purposes. To date we have approved more than €37 million for customers under this facility and are actively promoting its availability.
We have put comprehensive structures in place to support customers experiencing significantly more challenging times. These include dedicated and experienced relationship managers in our branch network and seminars focused on support and mentoring. A €26 million venture capital fund was recently announced in conjunction with Enterprise Ireland and the University of Limerick. We have been working with Enterprise Ireland on a number of other initiatives, including secondments of its staff to Bank of Ireland and vice versa.
Bank of Ireland believes that a vibrant and sustainable SME sector is vital to the Irish economy. I can assure the committee that we are firmly committed to supporting our current and potential customers in that sector through these very challenging times.
Turning to mortgage customers, although overall market demand remains muted, the past few months have seen some positive signs of uplift, for example, we have seen an improvement in overall applications and drawdown trends compared with previous periods. Through mortgage focused advisers, advertising and local activity in our branches, we are promoting mortgage availability, in particular for first-time buyers, and we are supporting our customers. We have lent over €1.5 billion in new mortgages in the first nine months of 2009, with €475 million of this going to first-time buyers. We are currently approving over 350 mortgages per week. A total of €750 million of our €1 billion first-time buyers, FTB, fund has been approved for customers, and we expect to announce an additional FTB fund of a further €1 billion shortly. We have recently launched a campaign aimed at the trader-up buyer segment, which members might have seen. Given current market uncertainties and their impact on customer decisions, actual drawdowns do not yet match the level of application and approval activity I have mentioned. However, we have seen a more positive drawdown trend in recent months.
Bank of Ireland fully supports and adheres to the arrangements that have been put in place to help and assist customers in financial difficulty, including the Financial Regulator code of conduct on mortgage arrears and a joint protocol with the Money Advice and Budgeting Service, MABS, which covers the area of debt management. When a mutually acceptable arrangement is entered into with a mortgage customer and it is maintained, subject to ongoing reviews, legal proceedings will not be initiated as long as the agreement is maintained. Bank of Ireland always encourages customers to contact the bank at the earliest opportunity, and we will work to complete a full financial review and identify and agree options available to individual customers given their particular circumstances.
With regard to our larger corporate customers, we have a corporate banking division which is actively involved in supporting and managing almost 400 customer relationships in Ireland, focusing on larger and mid-sized corporate transactions. We increased our financial support to existing customers by over 40% in the year ended 31 March 2009 and customer numbers increased by 10% during this time. We are receiving an increasing number of approaches from non-Bank of Ireland customers and are supporting these where the business and financial risks are deemed acceptable. In summary, Bank of Ireland is very much open for business — supporting our customers and aiding economic recovery across consumer, small business and corporate markets.
Our second strategic priority is to strengthen our capital; we are committed to building our capital ratios over the medium term in line with the changing norms for European retail and commercial banks. Our third priority is to rigorously manage our asset quality. We continue to actively manage our credit risks and have re-assigned many of our staff to the intensive management of our more challenged portfolios.
Our fourth priority is funding our balance sheet effectively. Funding conditions have improved and this has enabled us to strengthen our key balance sheet metrics. Our proportion of customer deposits to other funding has improved over the past six months despite intense competition in the market here. This, together with the lengthening of the maturity profile of our wholesale funding, has enabled us to reduce the quantum of our wholesale funding by €13 billion over the six months and to extend its maturity profile. We have large pools of contingent collateral standing at €43 billion at 30 September 2009, and our use of this contingent collateral to borrow from monetary authorities, representing €7 billion net at 30 September 2009, is approaching normalised levels.
We continue to manage our costs rigorously, which is the fifth and final priority, and to re-align our cost structure and cost base to an environment of lower levels of new business and activity. We have reduced remuneration and the number of people we employ across the group by 1,700 over the last 12 months. By March 2010 we will have reduced executive positions in the group by 20% from the number which existed 12 months ago.
The final item I wish to mention is our EU restructuring plan. The committee will be aware that under EU competition rules, there is an obligation to file a restructuring plan within six months of receiving state aid. Bank of Ireland filed its restructuring plan at the end of September. We emphasised initiatives being implemented outside Ireland to reduce our balance sheet by €37 billion, thereby increasing our capacity in the Irish market. We also emphasised our initiatives to manage our capital and move to a more normalised funding base. Over the life of the restructuring plan, we will eliminate our reliance on the Government deposit guarantee, repay the Government's €3.5 billion preference shares and pay €1.7 billion in preference share coupons and deposit guarantee fees, of which in excess of €400 million will be paid in our current financial year, leaving the State with a significant shareholding in a profitable, fundamentally sound bank supporting the Irish economy and competing actively in the Irish market. The processes and interactions surrounding the restructuring plan will take some months to conclude.
To summarise and conclude, the last 12 months have been very challenging for the group. However, the support of the Irish Government and taxpayer and our continuing focus on key priorities has brought greater stability to the bank. As we look ahead, our focus remains on these priorities and the clear goals that we have set ourselves for continuing to make progress against them. Bank of Ireland remains committed to supporting its personal and business customers. Our future is dependent on our customer base and on a recovering, vibrant Irish economy. Bank of Ireland is determined to play a very strong role in supporting its customers and in assisting the economy to recovery and future prosperity. I thank the committee for its attention.