Bank of Ireland SME lending up 13% year-on-year

The Bank of Ireland’s lending to the SME sector increased by 13 per cent year-on-year in 2014 up to €4.5bn.

With a total of 61,000 credit applications and an 88 per cent approval rate, the vast majority of small business owners that applied for credit were able to secure it to help drive business growth.

Bank of Ireland now accounts for over 50 per cent of all lending to the SME sector, excluding property-related lending, according to new figures from the Central Bank.

Mark Cunningham, director of business banking, Bank of Ireland, said: “Agriculture continued to be a very important growth sector for the bank, with overall approvals to the sector exceeding €620m, a 19 per cent increase over the previous years; €135m was approved for land purchase and we approved funding for over 24,000 acres of land.

“The demand for agri overdraft permissions also increased and we continued to grow our customer base.

“Agri overdraft balances decreased by nine per cent compared to 2013 indicating strong on-farm cash flow during the year.

“However given the reductions in commodity prices during late 2014, in particular in the dairy sector, some of the overdraft reserves are likely to be called on during 2015. Reduced milk prices this year will likely see greater reliance on bank funding for farm development as cash flow surpluses reduce from 2013 and 2014 levels.”

Bank of Ireland was the first of Ireland’s domestic banks to return to outright profitability last year, with the Government still retaining a 14 per cent stake valued at €1.4bn.

“The pick-up in the general economy has been evident in employment gains, increased business investment, recovery in the construction sector and improving tax revenues,” added Cunningham.

“Activity in the retail sector also gained momentum last year with the latest data showing that sales improved by close to five per cent in the year to November.

“The outlook for 2015 is positive. Consumer confidence levels at the end of 2014 were close to seven-year highs and employment gains are set to continue, supporting a further rise in consumer spending.

“While the economy demonstrated significant growth in 2014, business owners are still cautious as the memories of the downturn still linger and this is particularly evident in the low utilisation of working capital facilities.”

Date published 28 Jan 2015 | Last updated 28 Jan 2015