THE fact that private investors are prepared to put money into Bank of Ireland does not mean the bank will suddenly start lending to house buyers and small businesses, experts said yesterday.
Although the investment move was welcomed, fears were expressed that personal and business customers would be hit with higher charges.
This was because the bank was still short of funds, director of Irish Mortgage Brokers Karl Deeter warned.
And there are fears that variable rate customers will now be hit with hefty rises in rates.
Bank of Ireland has yet to pass on the last two European Central Bank rate rises to its variable rate customers.
Mr Deeter said there would be no immediate flow of credit for house buyers and small firms.
Mark Fielding, head of the Irish Small and Medium Enterprises association, said there was a lack of competition in the Irish banking market.
"We hope this investment will shake up the old guard of banking in this country. We need some serious competition," Mr Fielding said.
He added there was little prospect of credit-starved small firms getting loans just because Bank of Ireland was getting new private investors.
"The banks are almost bereft of capital and small firms are the small guys who are being left behind in this," he said.
Mr Fielding said it would take a while for the Irish banks to dig themselves out of the hole that they created.
Director of personal finance website MoneyCoach, Frank Conway, said there was a desperate need for a fresh injection of outside investment to get banks to lend to potential home buyers.
"Irish banking continues to be (in a) state of crisis. Mortgage lending is heading for a 40-year low.
"The Irish economy urgently needs a normalisation of banking, where consumers and businesses can turn to for normal borrowing and financing needs. This should be a return to banking on the basis of sound due diligence and sustainable lending," Mr Conway said.