Dáil Éireann Debate, Tuesday - 11 February 2014
155. Deputy Michael McGrath asked the Minister for Finance the lending targets that apply to AIB and Bank of Ireland for 2014; the way the banks performed in respect of the 2013 targets; and if he will make a statement on the matter. [6546/14]
View answerAs the Deputy is aware, as part of the 2011 recapitalisation exercise, the Government imposed SME lending targets on AIB and Bank of Ireland for the three calendar years, 2011 to 2013. Each bank was required to sanction lending of at least €3 billion in 2011, €3.5 billion last year and €4 billion in 2013 for new or increased credit facilities to SMEs. Both banks have achieved their 2011 and 2012 targets. I am informed that both banks sanctioned circa €4bn in lending in 2013.
Having completed a process of deleveraging, both AIB and Bank of Ireland are now concentrating on growing their balance sheets. In this context, both banks recognise the need to increase business lending in the period up to 2016, including lending to the SME sector. Although the targets were a useful policy intervention, the focus now needs to shift towards the collation and examination, on a monthly basis, of more granular data on the funding of the activities of SMEs from both AIB and Bank of Ireland, the wider banking sector and increasingly the non-bank funding sector. This will facilitate the SME State Bodies Group and the Credit Review Office in monitoring progress against agreed annual SME lending plans and ensuring that new lending to SMEs continues to increase as a percentage of total sanctioned lending. I will keep this area under close scrutiny to ensure that the SME sector can access an adequate flow of credit to support the recovery of the economy.
