Mr. Brendan O'Connor:

There is something of a misperception that every SME will require compromise. The purpose of our group is to put specialists in place who can hand-hold customers through what might simply be a difficult time for them. We expect trading conditions to improve. Some of our customers have no debt other than working capital debt. We deploy short-term solutions most often in respect of those customers. I do not have the exact breakdown and it is reasonably fluid, but they probably account for 20% to 25% of the book.

Beyond that, we move to a situation where we put in forbearance in the form of, for example, a capital moratorium, no interest rate at all, an interest-only arrangement and so on. We modify the contract, but we put that in place while the company is proving viability, that is, proving that absent the overhang of debt, it would be a sustainable business. We have what I call medium-term forbearance for that proof period, for want of a better term, where both the customer and the bank are seeking satisfaction as to what is the future for the business and what is sustainable. In many cases - most of our customers understand this and we work with them on it - adjustments will have to be made to the core business itself. It is not just about debt; often it is about cost management, testing new markets and so on. In such cases, the types of instruments I talked about, including moratoriums, interest-only arrangements and so on, would come into play.

Where we determine that a company is viable, will require a right-sizing of its balance sheet and we will have to compromise on debt, we put in place a fundamental restructuring.

It is important to say that we contract that with the customer up-front to ensure they are not wondering what will happen in two, three, four or five years time. We put in place a five year or seven year solution. It could require disposal of non-core assets before we finally know what we are dealing with but we contract it up-front and we put in a longer-term restructure. Approximately 25% of the customers in that fundamental restructuring process are completed. Approximately 40% are currently in that process, and I hope that we would have the back broken on it by the end of 2014.