Small Businesses Poorly Serviced by Irish Banking Sector - According to Bank of Ireland

Accessing finance seen as the single biggest barrier to growth of their businesses

Bank of Ireland says that it will compete aggressively to grow its position as the leading bank for Irish SMEs

To mark the launch of the Business Switching Code at the end of June, Bank of Ireland has given small businesses an incentive to switch to Bank of Ireland today (Monday 26 June 2006) as it announced details of its Small Business Offering - an offer that is unrivalled by any other bank in Ireland. For the past 12 months, the Bank has primarily focused on developing initiatives for Medium sized businesses. While intending to continue momentum in this segment, it announced today that it is now focusing on Small business - a sector which Cathal Muckian, Director of Bank of Ireland Business Banking believes has been poorly served by all banks operating in Ireland. Mark Fielding, Chief Executive of ISME welcomed today's development.

Commenting, Cathal Muckian said: "We are fast emerging as a nation of entrepreneurs with almost 10% of our working population at the early stage of setting up their own businesses. The recent Small Business Forum report noted that 97% of Irish Businesses are Small as opposed to Medium. These businesses represent 40% of the Irish workforce. In general, banks operating in the Irish market serve Medium businesses well, however, they have failed to serve the needs of Small business. Despite the fact that we have a mature market with lots of competition, we still have a major sector of the Irish economy not being served by banks in Ireland."

Continuing, he said: "When Small business owners are asked about the biggest barrier to growing their businesses, they cite the difficulty of accessing adequate levels of finance. This is a poor indictment of the Irish banking sector and is something that Bank of Ireland as the leading lender to SMEs is seriously addressing - as is evidenced by today's initiative."

"New entrants into Irish banking talk endlessly about bringing competition into the sector, and this is something we as the leading lender to SME's welcome. However, at this stage, we would seriously question the actual substance of their offer to Small business. Bank of Ireland Business Banking is committed to be THE bank for SME's and to play an impactful role in fostering and encouraging entrepreneurship in Ireland. In particular, the banking sector has a responsibility to be far less judgemental in its dealings with entrepreneurs. Given the depth of Irish entrepreneurship activity, the banking sector must now begin to deal with SME's as business partners in the truest sense of the word - that means providing an offer that addresses greater access to finance while at the same time providing banking facilities that offer real customer value," he said.

As part of the launch today, Bank of Ireland Business Banking announced details of its Small Business Offering. The Small Business offering, with multi-channel delivery, is the culmination of almost a year of product and process development. Key elements of the offer include:

Endorsing, Bank of Ireland's Small Business Offer, Mark Fielding, Chief Executive of ISME said: "ISME, the independent business organisation, welcomes the Bank of Ireland initiative for small businesses and for start-ups in particular. Small businesses have historically reported difficulties with obtaining start-up finance and appropriate facilities and this initiative is a step in the right direction and hopefully will improve the banking environment for the SME."

Bank of Ireland Business Banking will continue its focus on developing specific sectoral propositions for the market in 2006. New offerings for the Agri and Retail sectors will be announced in the coming months.

Cathal Muckian concluded: "Our Business Banking customer base is undergoing rapid change in a business environment where sectoral growth is shifting from agri and manufacturing sectors to services, and where the entrepreneurial spirit is now hugely evident. This is combined with the growing number of ethnic businesses, and the introduction of the Switching Code this week. We regard our Small Business Offering as a step to further developments and initiatives, which will create for us further and deeper partnerships with Small and Medium businesses. No other bank in Ireland is providing such a comprehensive package for Small business. This initiative will stimulate competition within our own sector, something that will be welcomed by all SMEs, while at the same time we are confident that Bank of Ireland will continue to be the Bank of choice for this growing and hugely important sector of the Irish economy."

ENDS

Monday 26 June, 2006

For reference;

Anne Mathews
Media Relations Manager
Bank of Ireland Group
Tel:01 6043836 / 087 2460358

Dermot Nolan
Head of Business Marketing
Bank of Ireland Business Banking
Tel:01 604 3349 / 086-2429167

Note to Editor:

Bank of Ireland is the number one Bank for SMEs (27% lending share, compared with AIB's 25%, Ulster Bank's 14%, Bank of Scotland, Ireland's 8% [Source, MORI Ireland Research Sept '05]) providing over 100 loans daily to this sector.

Bank of Ireland has dedicated business managers available through each of its 270 strong nationwide branch network. Its business offer encompasses the full range of day-to-day business banking services as well as specialist Treasury, Commercial Finance, Credit card, Life Assurance planning services and Venture Capital. Over 60,000 customers have registered for its "Business On Line" service.