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Contents
Report homepage
Contents
Issues in the Market
Future Opportunities
Market in Brief
Market Background: The Banking Industry
Internal Market Environment
Broader Market Environment
Market Size and Overview
Segment Performance
Strengths and Weaknesses
Suppliers
Buyers
Appendix
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Access to Credit for SMEs (Industrial Report) - Ireland - June 2010
Table of Contents

Issues in the Market

Future Opportunities

Regaining lost trust

White Knights on the horizon?

Market in Brief

Market growth comes to an end

Figure 1: The market* for SME banking in IoI, 2003-09

Is the need for short-term finance being met?

Figure 2: The Structure (% of amounts outstanding) of SME credit market by type of credit, 2007-09

Self finance increases in importance

Government support vital

Market Background: The Banking Industry

Key points

Little competition

Figure 3: The main business banks in IoI, April 2010

A common business model

Figure 4: The regulation and oversight of SME banking in NI, April 2010
Consolidation among RoI regulation bodies
Figure 5: The regulation and oversight of SME banking in RoI, April 2010

What banks offer SMEs

The Long Tail Effect

SMEs associations

Internal Market Environment

Key points

Access to finance a key problem for SMEs

Figure 6: The most pressing problems facing SMEs in Ireland and the UK, June-July 2009

Most SMEs rely on external finance

Figure 7: The finance sources used by SMEs in the past six months, June-July 2009

With short term funding becoming a growing issue

Figure 8: The average payment period (days) for monies owned to SMEs in IoI, Q1 2007-Q1 2010

Half of SMEs turned down for credit

Figure 9: How has the willingness of banks to lend money changed in the past six months, UK and RoI, June-July 2009

We were just following orders

Governments step in to help SMEs directly…

UK government streamlines its offer
Figure 10: UK/NI government initiatives to improve SME access to finance, 2008-10

Irish government put pressure on the banks

Figure 11: UK/NI government initiatives to improve SME access to finance, 2008-10

Government’s intervene to stabilise the banking industry

Deposit guarantees – designed to build confidence
Bank recapitalisation – designed to stop banks falling over
UK banking market sees massive recapatilisation
NAMA set up
Figure 12: The NAMA “Haircut” by Institution, 2010
UK Government sets up the Asset Protection Scheme
Bank nationalisations
Lending Targets in the UK
Similar targets in RoI

European Investment Bank also supports SMEs

Prudential Capital Assessment Review Figures Published

Increased lending targets in 2010

Efforts to improve competition in the banking industry

Micro businesses have better choices

Cost of finance falls

Figure 13: UK and RoI Interest rates, April 2008-February 2010

Broader Market Environment

Key points

The crunch undermines banks capital…

A deep recession hits SMEs hard…

Figure 14: Outlook for GDP, unemployment and government spending in NI and RoI, 2008-10

Recession leads to turnover to decline

Figure 15: Turnover trends among SMEs in RoI and UK in the past six months, June-July 2009

Profits nosedive

Figure 16: Profit trends among SMEs in RoI and UK in the past six months, June-July 2009

Fixed investment takes a big hit

The recession drives down business borrowing

Figure 17: The value of loans outstanding granted to non-financial companies in the UK and RoI, Feb 2007-Feb 2010

SMEs keep tight rein on their debt

Figure 18: Debt to Asset Ratio trends among SMEs in RoI and UK, June-July 2009

Business failures in RoI on the rise

Figure 19: Summary of creditors’ voluntary liquidations, high court liquidations, receiverships and examinerships, RoI, 2008 Q1-2010 Q1
NI insolvencies also high
Figure 20: Company insolvencies (Compulsory liquidations and creditors voluntary liquidations) NI, 2002-09

Exchange rate helps SMEs in NI

Figure 21: The Monthly average spot exchange RATE, Euro into Sterling, Jan 2007-March 2010

Market Size and Overview

Key points

Data revision

RoI market stagnates while NI market continues to grow

Figure 22: The market* size for SME banking, IoI, RoI and NI, 2003-09

Demand for credit falls in RoI

NI SME market growing

Figure 23: Indexed trends of IoI SME banking market 2003-13

Segment Performance

Key points

Levels of credit fall in RoI, increase in NI

Figure 24: The SME credit* market, IoI, RoI and NI, 2003-09

Bank loans dominate the credit market

Figure 25: The Structure of SME credit market by type of credit, 2007-09

Short-term, unsecured credit becomes less popular with the banks

Figure 26: The structure of the credit market in RoI and NI (€m), 2007-09

Deposits continue to rise despite the recession

Figure 27: The level of SME bank deposits in IoI, 2003-09
Figure 28: Indexed trends of IoI SME deposit market 2003-13

Strengths and Weaknesses

Strengths

Weaknesses

Suppliers

Key points

AIB plc/AIB Group

Background
Small business banking offer
Business activities
Figure 29: AIB Non-personal loans*, 2005-09
Recent Developments: Government Assistance
Figure 30: Criticised Loans of AIB Group, December 2009
Future Focus

Anglo Irish Bank Corporation Limited

Background
Small business banking offer
Recent Developments: Government Assistance
Figure 31: Division lending balances of Anglo Irish banks, December 2009
Future Focus

Bank of Ireland

Background
Small business banking offer
Small business activities
Recent Developments: Government Assistance
Figure 32: Bank of Ireland loans and advances to customers, 31st December 2009
Future Focus

Bank of Scotland (Ireland) Ltd

Background
Small business banking offer
Recent Developments: Government Assistance
Future Focus

National Irish Bank Ltd

Background
Small business banking offer
Recent Developments: Government Assistance
Future Focus

Ulster Bank Group

Background
Small business banking offer
Small business activities
Figure 33: The business related value of loans outstanding of Ulster bank, 2008-09
Recent Developments: Government Assistance
State Investment
Asset Protection Scheme
Figure 34: Ulster bank assets covered by the asset protection scheme, December 2009
Future Focus

Others

Barclays
HSBC
RaboDirect.ie
Santander

Buyers

Key points

SMEs play a key role in the RoI economy

Figure 35: Make up of roi businesses by enterprise size band and persons employed, 2008

SMEs more vital to NI economy

Figure 36: Make-up of NI businesses by enterprise size band, 2008-09

SME numbers tending to rise before the crunch

Figure 37: Trends in Small Business Numbers in Ni, 2005-09

Recession hits SME numbers

Figure 38: Change in the number of enterprises by employment size in NI, 2008-09

Appendix

Market size tables

Figure 39: The SME credit and deposit market in RoI, 2003-09
Figure 40: The SME credit and deposit market in NI, 2003-09

Miscellaneous tables

Figure 41: House completions, by year, RoI 2001-08
Figure 42: Company insolvencies, by industry sector for three months ended 31 March 2007-09
Figure 43: Company insolvencies, by industry sector, RoI, 2004-08