Peadar Tóibín (Meath West, Sinn Fein)
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14. To ask the Minister for Finance his views on the Central Bank's private debt figure, households and corporations combined, coming to 258% of gross domestic product in the third quarter of 2015, given economic commentators noting that this is dangerously high considering that economic activity is bound to slow down some time in the not too distant future; to provide an update on the overall debt position for Irish small and medium enterprises; his policy on dealing with their non-performing legacy debt; and if he will make a statement on the matter. [9195/16]

Michael Noonan (Limerick City, Fine Gael)
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Firstly, the Deputy should note that the figures he has quoted refer to loans outstanding for Households and Non-Financial Corporations (NFCs).  It does not include assets held by these groups and so does not cover their net financial position. The most recent Central Bank Quarterly Bulletin reports on this

(). It notes that Household debt at end September 2015 stood at its lowest level in almost ten years and that overall household debt has fallen by 26 per cent since its peak in the third quarter of 2008. The  Bulletin also notes that debt sustainability also continued to improve in 2015. Debt as a proportion of total assets has been declining since the second quarter of 2012 and stood at 19.4 per cent at end-September 2015. Furthermore, over the past year, Irish households have reduced debt as a proportion of disposable income by 24 percentage points, to 160 per cent. The decline in these indicators reflects falling debt levels, as well as the increase in household total assets and disposable income. Meanwhile, the cost of servicing outstanding household debt remained broadly stable throughout 2015, as the interest rate on total outstanding loans to households averaged 3.33 per cent over the year. The equivalent rate for the euro area as a whole was 3.54 per cent over the same period. Household net worth, calculated as the sum of housing and financial assets minus liabilities, rose to €618 billion, or €133,225 per capitaat end-September 2015.

In the case of Non-Financial Corporations (NFCs) the bulletin notes that NFC debt as a percentage of GDP continued to decline in the third quarter of 2015 (184 per cent). It also notes that  when analysing Irish NFC debt trends, it is important to note that Ireland has substantial multinational corporation (MNC) activities, which have little interaction with the domestic financial system. Though NFC debt as a percentage of GDP is currently at its  lowest level since Q2 2009, it remains high in an international context. Ireland ranks third highest among European countries in terms of NFC debt to GDP, behind Luxembourg (328 per cent) and Cyprus (231 per cent), both countries that also have relatively large MNC sectors.

Notwithstanding this, the overall level is high and this is explicitly recognised in the risk table of the recently published Stability Programme Update

(). 

As regards SME legacy debt, Chapter 7 (Finance for Growth) of this year's Action Plan for Jobs (APJ) sets out a range of commitments to ensure viable SMEs can access appropriate finance at a reasonable cost from both bank and non-bank sources. In line with Action 144 of the APJ, officials from my Department continue to collate and examine data from AIB and Bank of Ireland on a monthly basis, including data pertaining to SME legacy debt. Furthermore, my officials meet the banks on a quarterly basis to ensure an informed understanding of the wider SME bank lending environment which assists the development and implementation of policies aimed at ensuring SME access to finance and increased competition in the SME lending sector. In addition, I am informed by the Central Bank of Ireland that, as part of their on-going supervision, the Central Bank, working in conjunction with the European Cental Bank (ECB) as part of the Single Supervisory Mechanism (SSM), continues to challenge the banks on their strategies, management, measurement and reporting of the resolution and restructuring of all non-performing loans (NPLs) 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 ongoing, 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 has indicated that it has 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.

Peadar Tóibín (Meath West, Sinn Fein)
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15. To ask the Minister for Finance given the Central Bank of Ireland's private debt figure, households and corporations combined, which came to 258% of gross domestic product in the third quarter of 2015, the details of the monetary value of private debt, households and corporations combined, by households, by small and medium enterprises, by multinational corporations, by foreign multinational corporations, by banking and by foreign banking including foreign businesses in the Irish Financial Services Centre, in tabular form. [9199/16]

Michael Noonan (Limerick City, Fine Gael)
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Please find data provided by the Central Bank of Ireland as follows.

Data on the stock of private sector credit outstanding firm size (SMEs) on a quarterly basis is available here ). Data by residency (resident versus non resident) is available in the Locational Banking Statistics published by the Central Bank ()showing the net position (liabilities less deposits) of domestic versus IFSC banks, but figures are not reported to the same level of disaggregation as that reported in the table.