Dara Calleary (Mayo, Fianna Fail) | Oireachtas source

I thank both organisations for coming in today and for their ongoing help in our day-to-day existence. Having said that, the presentations are altogether at variance with what we are dealing with. In page 2 of his presentation outlining his observations of the banking market, Mr. Trethowan stated that the centralisation of credit decision making taking place, coupled with the reduction of many rural branches and the continuing churning of front-end staff, has led to many SMEs feeling isolated and remote from the banks. That is a rather diplomatic way of putting it. I have questions for both organisations and I will turn over and back.

Mr. Trethowan also stated in the two previous reports that he has encouraged banks to do more to support enterprise-type lending. His view is that a low-risk appetite and overly tight lending policies have gone too far to ensure that new lending and future loans do not cause a repeat of the recent past. He also stated that excessive prudence may risk banks not fully supporting an economic upturn when SMEs require access to more working capital to invest. Will Mr. Trethowan expand on that, please? Will Mr. Farrell respond to those two comments from the Credit Review Office?

The survey referred to the level of credit for SMEs as 37%. However, the Central Bank published Irish SME credit supply and demand: a comparison across surveys and countries. This was a presentation of research by Sarah Holton and Fergal McCann. It stated that Ireland has the second highest rate of discouraged borrowers in the eurozone. These are defined as firms that do not apply for a loan despite requiring credit. We all know that. We know people are not submitting applications and that they are advised by the relationship manager in their bank not to bother because it will not happen. What measurement does the Credit Review Office have of that? Is there any system in the Credit Review Office to review what the Central Bank says about discouraged borrowers? Will Mr. Farrell and Mr. O'Regan comment on that finding? Where in the system are we tracking these customers and their need for credit? It appears they are not coming into the system.

Mr. Trethowan remarked that some sanctioned term loans take some time to be drawn down. Will he outline some more of his knowledge in this regard? Part of the reason they take some time to be drawn down is the fact that more hurdles than in the Grand National are put in front of businesses before they can complete a loan or complete a revision of a loan. I know of cases lasting seven, eight or nine months from the time a loan was initiated and they are still on desks. We hear of this every day from the business organisations and businesses. Is there any sense among the deputations of introducing some time limit such that if information is not supplied then the loan is deemed dead, everyone moves on and it is not treated as an outgoing application?

Mr. Farrell referred to Ireland's credit trends in the context of the eurozone. Will he provide the United Kingdom figures as well? Many organisations like to provide a comparison of Ireland in the eurozone. We share a currency with those countries but not much else. Our way of doing business bears greater similarity to Northern Ireland and the United Kingdom rather that the rest of the eurozone. Is there any chance of the Irish Banking Federation providing those figures as well?

Mr. Trethowan's first point related to the alienation of businesses from the banking system. I refer to Bank of Ireland's so-called bank of the future policy. "Bank of the future" is Bank of Ireland's phrase. Initially, the idea is to target small businesses, including retail and hospitality businesses, with a turnover of €20,000 or more. The bank is assigning days that these enterprises are allowed to lodge. On other days they are not welcome to lodge money, including coins and cash. They bring cash or coins to the bank via four suggested security organisations, those we see around the town, a service for which the businesses must pay. On other days they are informed that they cannot lodge money. They incur the cost of bringing money to the bank. For example, if a business operator normally lodges on a Monday and he is instructed to lodge on Tuesdays, he misses the day that money normally hits the bank account and the day when he has the ability to deal with the takings from the weekend straight away. If there was one example of Mr. Trethowan's initial comment about the alienation from the banking system, that is it. These banks are closing branches and cutting the number of desks available for cash and coin transactions. One cannot lodge coins through a machine.

All the business organisations have been before the committee. Chambers Ireland will be before the committee presently. Its view is of a system completely disconnected from the reality of businesses. The Irish Banking Federation can produce all the figures it wishes but it is rather like a college lecturer. The theory is great and I have no doubt it is happening. Mr. Farrell referred to 80,000 credit applications, but what was the total number that applied? What was the overall amount? There are people here from every part of the country. There is no sense of reaching out to local branches, in particular on the part of the two pillar banks.