Mr. Bernard Byrne:

The issue of the availability of credit in the economy is one on which there are many views. There are numerous surveys out there, many of which, of late, are moving in a very similar direction. A very interesting survey in terms of its commentary is that of InterTradeIreland, which is largely independent. In regard to perceptions of the availability of bank lending, the report states, on page 58, "SMEs are not forming their opinion based on personal experience". In fact, InterTradeIreland found that only 20% of SMEs who answered a question in this regard did so based on their own experience. On the other hand, 43% formed their opinion based on media reports, and 40% on the basis of general commentary outside of the media. We need to arrive at a common view on this issue.

We have tried to be as clear as we can in terms of what happens in an approval process. If somebody does not apply for credit, it is difficult to arrive at accurate data by tracking applications. We tried to do something in this regard a year or 18 months ago, but people are still basing their views on the anecdotal conversation in the golf club and so on. We decided to focus specifically on the issue of SME credit to see what could be done there. Members might be surprised to hear that the majority of loan applications from small businesses are for less than €30,000. In fact, 60% of all applications are for less than €25,000, with €19,000 being the average. We put in place an initiative in our branches where a two-page application form was provided for SME loan applicants, with a commitment given that they would have an answer by close of business the following day. There is no external involvement in the credit application process; it is done in-branch and the answer is given the next day. We have a 97% approval rate in respect of those transactions and 95% of the amount is drawn down. That is the quickest way we could find to put in place a local discretionary and decision-making capacity, and it has worked very effectively in each local community.

Once one moves up the chain and into general surveys, we are confident that what is coming out of DKM and the Department of Finance accurately reflects what is happening on the ground. However, it is very difficult to beat the anecdote when it is not recorded. We are constantly advising people to put in a formal application. I would prefer if the approval rate had to decline in order to ensure we had the entire population included. If it really matters to people's business, we are urging them to put in their application. If we reject it, it can be submitted to our internal appeals process. If the applicant is rejected on appeal, he or she can go to the Credit Review Office, where there are very competent and capable people to assist them. These are the mechanisms we have in place and we try to encourage people in that direction. We discourage them from doing anything other than following the formal application process.

In terms of the availability of credit, our loan to deposit ratio, which was a crucial issue for us, is below 100% at this point.