THE IMPORTANCE of the two “pillar” banks meeting their commitment to lend €6 billion to the small business sector this year was emphasised by the Government at yesterday’s meeting of the economic council meeting.

The high-level talks on SME lending, which saw the Taoiseach, the Tánaiste and the Minister for Finance meet chief executives from the three largest banks, were described by several participants as “productive”.

A spokesman for the Department of Finance said a “good discussion” took place about the other initiatives which the Government had put in place to ensure credit was flowing to the SME sector, such as the credit review office and the loan guarantee scheme for small businesses.

The Government also emphasised to AIB and Bank of Ireland the importance of meeting their SME lending targets.

The two “pillar” banks are required to lend €3 billion each to SMEs this year as a condition of the State’s support for the institutions.

Chief executive of Bank of Ireland Richie Boucher told reporters yesterday that the meeting had been “very productive”.

A spokeswoman for the bank said it would not be providing any additional public comment on what was a private meeting. However, she said the bank was on track to reach its lending target.

“We have committed to lending €3 billion to SMEs this year and we’re confident that we will reach that target,” the spokeswoman added. “To date [to the end of October] we have lent approximately €2.5 billion to SMEs.”

Alan Kelly, director of corporate affairs and marketing at AIB, described the meeting as “positive and productive”.

“We recognise we have much more to do for our SME customers and we were talking about the steps we are taking and will take in that regard.” He added that AIB expected to meet its €3 billion lending target this year.

Ulster Bank, which was also represented at the meeting, had no comment to make.

A banking source said the Government members were first given a presentation by officials from the Department of Finance, then proceeded to hold a series of meetings with each of the banks individually.

All participants then met to discuss issues of common ground.

“There was a useful and frank exchange of respective points of view,” the source said, with the banks seeking to reassure officials that they intended to meet their business lending targets.

It is understood the portion of yesterday’s meeting covering SME lending went more smoothly than that relating to mortgage interest rates. AIB confirmed yesterday it would not be passing on the ECB’s recent interest rate reduction to its variable mortgage customers.