Marcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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56. To ask the Minister for Finance if Allied Irish Banks and Bank of Ireland, to meet their contractual obligations with the Strategic Banking Corporation of Ireland, are required to apply a minimum percentage (details supplied) reduction on interest rates; the rate of this minimum percentage reduction on business loan interest rates to SME applicants; if the banks are required to advertise the loan interest rates as having resulted from funding from the Strategic Banking Corporation of Ireland; and if he will make a statement on the matter. [38502/15]

Michael Noonan (Limerick City, Fine Gael)
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The Strategic Banking Corporation of Ireland (SBCI) was created to ensure increased lending, at a lower cost, to Irish SME's by channelling lower cost financing from EIB and KfW though lending partners known as on-lenders.

All on-lending partners of the SBCI, including AIB and Bank of Ireland are required, under contract, to pass on to their borrowers the full extent of the financial advantage accruing as a result of the SBCI's discounted interest rate. They are to achieve this by charging each relevant borrower a reduced rate of interest compared to the on-lender's standard rate of interest for a comparable loan.

The on-lender may pass on the reduction either by offering a single discount on each individual loan or by offering a single discounted interest rate to all customers within a portfolio.  The on-lender also has the discretion to supplement the SBCI discount with a further reduction, of its own, in the interest rate it charges. The percentage discount varies between on-lenders and from time to time in accordance with interest rate market movements, however the on-lender is obliged at all times to pass on to the borrower the full discount. 

In all marketing or promotional material for the lower-cost SBCI loans, on-lenders are required to confirm that the loans are supported by the SBCI and its funders.  The on-lender is also obliged to maintain a dedicated webpage on its website to provide information on SBCI funded products, and the SBCI has confirmed that each on-lender is currently complying with this requirement.

The relevant webpages for AIB and Bank of Ireland are as follows: