Boss defends claim of credit-rationing
Published 05/08/2010 | 05:00
AIB yesterday stoutly defended itself against charges it was rationing credit to small and medium enterprises (SMEs).
Managing director Colm Doherty said SMEs all over the country were not drawing down working capital that was already available to them.
He said it needed to be remembered that over a third of all SMEs didn't even borrow from banks.
"There will be companies not viable into the future,'' said Mr Doherty.
He added that while the bank had made a major commitment to SMEs, it needed to be said that certain SMEs were not going to make it through the recession.
He pointed out that 18pc of SME loans at AIB were impaired and there was a serious challenge in funding the sector. "But we are open for business,'' he added.
Mr Doherty said demand from SMEs was down in the first six months of the year compared to last year. "There is an issue with regard to demand.'' .
So far the government credit quality officer, John Trethowan, had not found evidence that the banks are rationing credit. Demand issues were the real problem, said Mr Trethowan.