ISME WORRIED AT LACK OF COMPETITION IN BANKING - Access to bank credit improved for small companies in June, July and August, according to ISME's quarterly bankwatch survey. The organisation which represents small businesses, says 58% of companies surveyed had accessed credit, an improvement on previous quarters, but the numbers approaching banks for credit fell. ISME says this is resulting in the postponement of investment, missed business opportunities and company closures. It also says 83% of companies reported that banks are making it more difficult to access credit.
ISME chief executive Mark Fielding says that 42% of companies who applied for funding in the last quarter were refused credit by their banks - this an an improvement on the 55% in the first three months of the year. But he also points out that the number of approaches fell from 33% to 25%. He says while some of this may be due to seasonal factors, it also shows that investments are being postponed which will lead to missed business opportunities, company closures and layoffs. He also says that due to a lack of competition bank interest, as well as bank charges, are rising. He says there is also a move to more personal guarantees for the funds. The amount of loan options have also decreased dramatically in the last few months, Mr Fielding says.
The ISME CEO says that credit is the life-blood of any business and he called on the Government to step in and establish a third banking force to deal specifically with lending to small firms.
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MORNING BRIEFS - Aryzta - the group formed when IAWS merged with Swiss baker Heistand, says its full-year underlying group revenue fell by 8.6% to €3.01 billion. Its operating profit increased by 2.2% to €305m. The group says economic conditions for consumers remain very challenging, and that it has responded by focusing on cost management, innovation and cash flow generation. It says the operating environment is likely to remain difficult in many key markets.
*** Shares in the US are set to end the month with the biggest monthly gains in over a year. September is typically a month of falls on Wall Street, and this month the US economic recovery was in question, but investors took cues from upbeat economic news to propel the major indices sharply higher during the month after a sell-off in August. So far, the Dow Jones has rallied 8.4%, its best monthly gain since July 2009. The latest lift also puts the Dow on track for its best September since 1939, when it rose 13.5%. The S&P has rallied 9.5%, the largest increase since April 2009, and the Nasdaq has surged 12.6%, the biggest jump since October 2002. Though the US economy is still not out of the woods, analysts do not foresee a pullback in stocks in the week ahead.
*** On the currency markets, the euro is trading at $1.3469 cents and 85.05 pence sterling.
