Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I thank the Deputy for raising the issue. I am informed by the Central Bank that, in 2012, the bank wrote to each lender active in the SME market requesting they devise strategies and implementation plans for resolving SME debt by making use of longer-term solutions than had been applied to up that point. A key objective of such strategies was to recognise viable businesses and to separate these from overhanging property debt in determining appropriate loan workout solutions.

Resolutions offered to SME customers in difficulty are assessed on the basis of the borrower's maximum affordability. The restructures are often complex due to multiple debt connections. Irish banks are well advanced in restructuring their SME loan books.  I am informed from the latest publicly available information that Bank of Ireland has indicated it had reached resolution in 90% of distressed SME cases and AIB's results indicate a resolution level of approximately 65%.  It is also worth noting that defaulted loans for both banks have reduced year on year. 

The Central Bank's process of assessing financial institutions, in its efforts to move distressed SME borrowers on to longer-term sustainable solutions, is an important element in assisting SMEs to transition to a more sustainable state.  This work will continue throughout 2014. Additionally, the Government's enactment of legislation to allow small companies, as defined by the Companies Acts, to apply to the Circuit Court for examinership and the ongoing work of the expanded Credit Review Office are all initiatives that will assist viable SMEs in addressing their debt situation and, consequently, enhance the employment prospects for the sector as a whole.

In light of the above, I would not agree with the Deputy's assertion that there is a delay in dealing with SME arrears.

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