Éamon Ó Cuív (Galway West, Fianna Fail)
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Question 70: To ask the Minister for Finance if he has had any discussions with the banks in relation to the provision of credit in the construction industry; the results of these discussions; and if he will make a statement on the matter. [19594/12]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, the Government has imposed lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks were required to sanction lending of at least €3 billion in 2011, €3.5 billion this year and €4 billion in 2013 for new or increased credit facilities to SMEs. I can confirm to the Deputy that both banks have achieved their 2011 targets. In addition to the lending targets imposed on the banks, the pillar banks are required to submit their lending plans to the Department and the Credit Review Office (CRO) at the beginning of each year, outlining how they intend to achieve their lending targets. My Department, in conjunction with the CRO, subsequently analyses the plan and meets the banks to discuss any issues of note. The banks also meet with my Department and the CRO on a quarterly basis to discuss progress. The monthly management meetings with the pillar banks also provide a forum for the issue of SME lending to be raised by my Department.

The overall target for lending to SMEs includes lending to the construction sector. The Government is conscious that the construction sector, in common with other sectors, needs access to credit. The remit of the Credit Review Office which was established to review decisions of the banks to refuse credit includes the construction sector. All loans to the construction sector are included in the construction sector lending returns. In his most recent quarterly report, the Credit Reviewer notes that whilst each banks' balance sheets have contracted during 2011, the monitoring of these figures show that no sector or geographic region has been adversely disadvantaged by each of the banks.

It is vital that the banks continue to make credit available to support economic recovery. However, it is not in the interest of the banks, businesses or the economy for finance to be provided unless the business is viable and has the capacity to meet the interest payments and repay the sum borrowed.