Sunday 25 February 2018

Watchdog calls for higher limit on threshold for SME appeals

John Trethowan: no demand to satisfy €8bn in new lending
John Trethowan: no demand to satisfy €8bn in new lending
Peter Flanagan

Peter Flanagan

THE head of the Government watchdog for lending to small businesses has called for a higher limit at which small firms can appeal to his office for help.

Credit Review Office boss John Trethowan said the Government should increase the threshold for appeals six-fold to €3m.

Mr Trethowan, who acts as an adjudicator for firms who are refused credit by the pillar banks, said companies were looking to re-finance their debts, and many were above the maximum level his office could work on at the moment.

"There are a growing number of companies looking to refinance their loans and while I would like to be able to help them, I can't do it because the amounts are more than €500,000," he claimed.

Both AIB and Bank of Ireland are mandated to lend €4bn each to small firms this year. Only a small fraction of that is likely to be "new" lending, however, leading to strong criticism from trade groups.

Mr Trethowan, though, made clear that there was no demand in the market to satisfy €8bn in new lending.

The former banker has regularly expressed concern about the lack of competition in the Irish banking sector and the impact that is having on SME lending.

Yesterday, he highlighted the problems that could be created if Ulster Bank pulls back on lending here as part of a restructuring by its parent RBS.

"RBS chief executive Stephen Hester had made clear his commitment to Ulster Bank. Now he's on his way out, so of course that is a worry," he admitted.

"The more lenders operating in the SME space the better, and it would be a blow if Ulster roll back on their strategy," he added.

Irish Independent

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