I propose to take Questions Nos. 85 and 86 together.
The restructuring of the domestic banking sector creates capacity for the pillar banks to lend in excess of €30 billion over the next three years in SME and other important sectors. This is in excess of Central Bank estimates of the likely demand for SME and mortgage credit over this period. Both pillar banks are concentrating on the Irish economy and need to issue credit to make profits and rebuild their balance sheets.
As the Deputy has mentioned, the Government has imposed lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks will be required to sanction lending of at least €3 billion this year, €3.5 billion next year and €4 billion in 2013 for new or increased credit facilities to SMEs.
Both pillar banks have provided me with their plans to ensure that the 2011 target is achieved. This is particularly relevant given the comments contained in the fifth quarterly report of the Credit Review Office, which stated that "it will be a challenge for each of the banks to reach their €3bn sanction target for new and restructured facilities in the current year." In this regard, my officials, along with Mr Trethowan, have quarterly meetings with the pillar banks to ensure that their lending targets are being achieved.
Although the level of lending to SMEs by the pillar banks in the year to date is commercially sensitive, I can advise the Deputy that both banks have informed my Department that they are on course to meet their lending targets for 2011.
The Credit Review Office will provide more clarity on the progress of the two banks in relation to the 2011 target when he issues his next quarterly report before the end of November.