Bank lending review published

A review by the Central Bank of lending strategies to small and medium enterprises has found that improvements could be made regarding planning, credit reviews and board involvement.

However, the Central Bank also said there was no evidence that banks had reduced credit standards to meet the SME lending targets set by the Government under its recapitalisation programmes.

In a statement today the bank said strategic planning by the institutions would be improved if boards became more actively involved at an earlier stage. More detailed information would also help banks use plans for risk management, it said.

The report, which included six banks, focused mainly on AIB, Bank of Ireland and Ulster Bank. KBC Bank Ireland, ACC Bank and Danske Bank Group, which trades as National Irish Bank, weer also included.

The report also found that some banks had completed a limited number of credit reviews in the past two years.

"Strong credit review processes are an essential component of strong risk management, and banks need to ensure this particular control is implemented regularly and to a high standard," it said.

Skills gaps within the banks were also being addressed, the report found, describing this as encouraging.