I propose to take Questions Nos. 20 and 68 to 70, inclusive, together.
As the Deputy is aware, the banking system restructuring plan creates capacity for the two Pillar Banks, Bank of Ireland and AIB, to provide lending in excess of €30 billion in the period 2011-2013. SME and new mortgage lending for these banks is expected to be in the range of €16-20bn over this period. This lending capacity is incorporated into the banks' deleveraging plans which allow for repayment of Central Bank funding through asset run-off and disposals over the period.
The Government has imposed SME lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks were required to sanction lending, including lending for working capital purposes, of at least €3 billion in 2011, €3.5 billion this year and €4 billion in 2013 for new or increased credit facilities to SMEs. Both banks achieved their 2011 targets.
The overall target for lending to SMEs includes lending to the tourism and farming sectors. The Government is conscious that these sectors need access to credit. The remit of the Credit Review Office (CRO) which was established to review decisions of the banks to refuse credit includes these sectors. In his seventh quarterly report, the Credit Reviewer notes that whilst each banks' balance sheets have contracted recently, the monitoring of these figures show that no sector or geographic region has been adversely disadvantaged by each of the banks. The Deputy should note that the CRO is overturning 60% of the decisions referred to them, supplying €6.9m of credit and supporting 683 jobs in the SME sector. I would appeal to SMEs who have been refused credit by banks to avail of the services of the CRO.
As the Deputy is aware, one of the key priorities of the Programme for Government is to ensure that an adequate pool of credit is available to fund SMEs in the real economy during the restructuring and downsizing programme. The Economic Management Council meets the banks on a regular basis and discusses the key issues pertaining to this priority.
In addition to the lending targets imposed on the banks,the pillar banks are required to submit their lending plans to the Department and the CRO at the beginning of each year, outlining how they intend to achieve their lending targets. My Department, in conjunction with the CRO, subsequently analyses the plan and meets the banks to discuss any issues of note. The banks also meet with my Department and the CRO on a quarterly basis to discuss progress. The monthly management meetings with the pillar banks also provide a forum for the issue of SME lending to be raised by my Department.
I should stress however that the Relationship Frameworks with the banks provide that the State will not intervene in the day-to-day operations of the banks or their management decisions including with respect to pricing and lending decisions. These frameworks are published on my Department's website at http://banking.finance.gov.ie/presentations-and-latest-documents/.
It is vital that the banks continue to make credit available to support economic recovery. However, it is not in the interest of the banks, businesses or the economy for finance to be provided unless the business is viable and has the capacity to meet the interest payments and repay the sum borrowed.