Ms Catherine Moroney:

I thank the committee for the opportunity to discuss AIB's support for SMEs in Ireland. I am the head of business banking with AIB and I am joined by my colleague, Ms Margaret Brennan, head of SME sector strategy and specialists.

SMEs have played a vital role in Ireland’s ongoing economic recovery, with small and medium-sized businesses now employing more than 900,000 people across Ireland. As Mr. O'Regan stated, while there are still challenges ahead, Ireland is expected to remain one of Europe’s fastest growing economies this year. We are very aware that AIB’s primary role in the economy is to support and facilitate our customers in dealing with both the opportunities and challenges that lie ahead for them.

AIB has 2.3 million customers and we serve their needs through a combination of our people and our physical and digital infrastructures. We consider both equally vital to our customers. We have 275 AIB and EBS branches, 20 business centres throughout the country and a 24-hour phone and online banking service, as well as innovation centres and connectivity with the colleges - there are more than 19 of them - to bring the depth and breadth of that to our customers. We also provide daily banking facilities to our customers through 1,100 An Post locations nationally. This partnership infills our distribution capability.

I will briefly outline AIB’s lending activity to SMEs. We have approved a total of €5.5 billion in new lending in Ireland in 2016, of which €1.2 billion was to SMEs. In the first six months of 2017, that lending increased a further 13% on the same period in the prior year. These figures exclude all renewed loan facilities and renewed working capital facilities, so they are a benchmark of new term lending in support of Irish business growth. I cannot discuss the full year figures to December 2017 because we are in a closed period. Those are the figures up to as far as I can go, however.

Business lending, and business generally, is still largely relationship-driven in Ireland and we have recently appointed new heads of new business banking in each of our 19 local markets. These are supported by dedicated teams of business advisers and relationship managers. The idea is that we would stay close to our customers at their place of business. To support our business customers and assist them with a detailed understanding of those businesses, we have many years of sectoral expertise and have recruited sectoral experts from industry. They support the teams and our customers directly.

As a result of Brexit, last year we appointed 21 specialist SME Brexit advisers in the communities that we serve and we encourage our customers to be proactive about planning. That is a big challenge for us.

In this period when we are not sure what will happen, we are trying to encourage them to take action where they can, particularly to protect themselves against currency movements. We have a range of product types, time periods and price points to cater for their needs and risks, both fixed and variable. Our business credit line is one of the most flexible and competitively priced working capital facilities available in the Irish market.

There has been a lot of talk about access to credit. We have a 48-hour decision period commitment for all SME loans up to €60,000. This covers the vast majority of SMEs. They can be guaranteed if they come to us with all of their information we will have an answer for them in 48 hours. This is the commitment we give. They can also access this online or over the phone as we have a full service suite. We have also strongly supported Strategic Banking Corporation of Ireland initiatives, those that have happened and the one that will be announced. It is the privilege of the Strategic Banking Corporation of Ireland to announce it and it is working on the conditions.

It is important to mention our customers who are experiencing difficulty in their business. Our absolute priority is restructuring their facilities so they can sustain viable businesses. Our absolute commitment and number one priority where our customers engage with us is to support them back to viability and keep jobs in those businesses throughout the structure process.

In terms of the diversity of funding available in Ireland, which is receiving considerable attention, we invest in seed venture growth and capital investment funds, and we have €161 million across 13 funds. With those partners our play into those markets is a total of €1.1 billion. We have invested in 200 companies creating more than 3,000 jobs.

We published in-depth customer research at the start of 2017. Originally we did this for ourselves to understand the blockages in terms of customers accessing equity as opposed to just senior debt on which the Irish market relies quite heavily. We had some interesting findings, which I can discuss in the questions and answers. One was a fear of losing control in the business. In addition to providing equity we also provide tailored mezzanine finance. This can often be the difference between making a project viable. If the equity and senior debt is not sufficient, the mezzanine finance can often plug this gap.

We provide full in-branch cash and coin service throughout our entire network. We do not restrict transaction types to specific days or times. We offer highly competitive rates for cash handling, including the lowest price in the market for processing euro note cash. Our customers tell us in our research that convenience is key and we work to help them to move towards digital payment methods, but this is a choice they make. We do this through our online, self-service and paperless options, but they retain the choice and the cash option is still there for them. In 2015 we launched a free business Internet banking platform to help encourage digital mobility. Smaller businesses can manage their finances very effectively on line.

In support of start-ups, we offer maintenance and transaction free banking and zero cash handling fees to a maximum discount of €100 per quarter. We define start-up as the first two years of business.

Through this combination of people, accessibility, distribution and connectivity, and supported and enabled by our technological and online capabilities, we provide customers with a comprehensive choice of access and supports. We look to bring decision-making and sectoral expertise close to the customers at their place of business. Our commitment to our customers remains, genuinely, our top priority. On behalf of the bank I thank the committee for inviting us before it.