Mr. Richie Boucher:

Our auditors would examine that. From a Bank of Ireland perspective, we have to grow our business. There is no shortage of capital to grow our business. The private sector has provided the capital for us to grow our business. We are comfortably and safely funding ourselves. We have cut our costs. We are investing in branches and payment systems. We do not make money by saying, “No”; we make it by saying, “Yes.” We have a risk appetite but we have to be careful. Our interest margin is 2%. We have to get 98% of our decisions right. We are in the business of taking risk.

I hear sometimes that someone gets put off asking for credit. I have to be blunt. I have met few successful businesspeople who were afraid to ask for something. The secret of business is persistence and consistency. My colleague, Mr. Liam McLoughlin, has colleagues who have to get loan targets. We have to grow our business. There are people charged with ensuring they get applications in and that they are processed. No individual, myself included, has sole personal credit discretion in the Bank of Ireland. There is always a second opinion underwriter.

While other banks have taken a cost perspective that they cannot afford investing in their branch network, we have heavily invested in ours to give it a chance. We believe having a presence in a local community is vital for the growth of revenue. Small and medium-sized enterprise, SME, lending is very branch based. It is all down to the knowledge of the local manager and his or her staff, properly trained to assess future cashflow perspectives and working with their customers. Their recommendation carries a lot of weight. Underwriting is separate, however, from recommendation. It is hard to approve a loan that has not been recommended, however. The recommendation of the branch manager is extremely important, provided we have worked hard to ensure he or she has been properly equipped to assess the credit and make the recommendation. It is their personal conviction that the bank’s money, our shareholders’ and depositors’ money, is properly identified in lending to that customer. It carries much weight but it is a separate decision.

I do not have a strong view on credit unions. For us, lending to SME’s has a relative level of risk. It is about having a range of products from overdrafts to receivable finance to foreign exchange products. We have to constantly refresh our skills level. The skill we have to develop and work on the whole time is our ability to assess what might happen in the future, not what happened in the past. We have to assess how a businessperson has thought about the future for their business, how have they assessed the opportunities and the threats to it and how we can mitigate the threats and avail of the opportunities. That takes time, experience and tools to build up. We have worked hard on this and recognised that cash flow forecasting is not an innate skill. Much lending in the past was done purely on collateral. If a customer goes to our website, he or she will find a cash flow tool which helps them think about their predictions of future cash flows.