Michael McGrath (Cork South Central, Fianna Fail)
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14. To ask the Minister for Finance if he will publish updated targets for dealing with debt in small and medium sized enterprises by the State-supported and other banks; and if he will make a statement on the matter. [1324/16]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Central Bank of Ireland that, as part on-going supervision, the Bank, working in conjunction with the ECB as part of the Single Supervisory Mechanism, continues to challenge the banks on their strategies, management, measurement and reporting of the resolution and restructuring of all non-performing loans including SME NPLs. Relevant actions taken by the Central Bank in recent years have been extensive and include inter alia capital assessment reviews, stress tests, distressed credit operation reviews, balance sheet assessment exercises, SME loan resolution bank specific targets, on-site inspections and on-going, intensive supervisory engagement with the banks regarding distressed debt.

In 2013 non-public institution specific SME distressed loan resolution targets were set for a number of banks. The targets required the banks to develop strategies, at borrower level, to resolve their non-performing loans. The targets ended in Q1 2015 with lenders reporting that they satisfied the requirements set out. Progress has been made by the relevant institutions in resolving SME NPLs in recent years and NPL trends continue to move in a positive trajectory. Bank of Ireland have indicated that they have reached resolution in 90% of distressed SME cases and more than 9 out of 10 restructured business banking borrowers continue to meet their agreed arrangements. AIB has also made significant progress in reducing distressed loan balances with the process of restructuring the group's SME book reaching its latter stages with the majority of offered SME restructures either complete or at the final stages of completion.

Recognising these developments, alongside changes in the supervision of the banks following the introduction of the SSM, the Central Bank's approach to commercial NPL resolution utilises a bank specific approach taking into consideration a number of factors including inter alia the institution's NPL resolution strategy and operational capability. The sustainable resolution of distressed SME loans remains a significant priority for the Central Bank and will therefore continue to be central to their supervisory focus throughout 2016 and beyond. Supervision will continue to be intrusive, supplemented by targeted inspections and enhanced monitoring of performance of the banks in delivery of supervisory objectives.