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BoI says it's beating new lending targets

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Bank of Ireland says it is beating its target for the amount it lends to small businesses, with €1bn of loans approved so far this year.

The bank said it has signed off on €1bn in either new lending or increased lending to small and medium enterprises (SMEs) in the first three months of the year. The figures include lending to farms.

The partially state-owned bank and state-owned AIB have been set lending targets by the Government in an effort to restore the flow of credit through the economy.

The targets have proved controversial with some business groups claiming that banks have counted rolling over existing debt facilities and overdrafts towards their tallies.

Bank of Ireland said its figures excluded restructuring of existing debts.

The lending tally in the first three months of this year was 25pc higher than in 2012, a spokeswoman for the bank said.

It put much of the increase down to greater demand for loans from industry. There was strong growth in demand from the manufacturing, agriculture and hospitality sectors.

In 2012, Bank of Ireland approved €3.6bn in new and increased lending to SMEs.

Demand for finance is up across most sectors, according to Mark Cunningham, director of Business Banking at Bank of Ireland.

It's led by increased demand for working capital rather than investment capital.

The bank says some of its increase is driven by customers, who had been with other financial institutions, seeking to refinance debt with Bank of Ireland.

Executives at the bank say they are providing around 50pc of all new, non-property lending to small business.

Irish Independent