More than one in three mortgages applications were turned down by Irish banks last year it has emerged.
The figures were contained in a letter from Finance Minister Michael Noonan to Fianna Fáil's finance spokesman Michael McGrath.
The letter, seen by RTE News, said there were more than 28,500 applications for mortgages to Irish banks.
However, only 17,700 were approved by AIB, Bank of Ireland, EBS and Permanent TSB. That indicates that 38% of applications are being turned down.
But the true figure is likely to be even higher as the number of applications did not include information from EBS.
AIB claims it is providing 45% of all new mortgages
AIB has said it has approved seven out of ten mortgage applications and is providing 45% of all new mortgages issued in the market.
In a statement, the bank said that in July alone it approved mortgages with a total value of €155m - the largest monthly approval rate in almost three years. It said it is seeing ''significant growth'' in its market share this year with the number of new mortgages approved rising by 70% year on year in June.
AIB also said today that it has sanctioned nine out of every ten loan applications from SME businesses and was 17% ahead of the Government's lending target in the first six months of 2012.
The bank's chief executive, David Duffy, said that while demand for credit remains weak, it is important to address the negative perception that banks are not lending, which is a factor in discouraging potential borrowers from seeking credit.
''The extension of credit on commercial terms to viable SMEs and to mortgage customers and the consequent growth of the performing AIB loan book are vital to this bank's objectives of supporting economic growth and ultimately achieving a tangible return for the taxpayer,'' Mr Duffy said.
He said the bank is working ''constructively'' with customers to identify and address specific issues as they related to access and availability of credit.
''Any perception that AIB is limited from lending because of capital constraints or a need to reduce the size of our balance sheet in incorrect. We want to lend and grow our balance sheet,'' he added.
Masding warns on effects of ''unusual rules'' on debt forgiveness
Permanent TSB Group chief executive Jeremy Masding said the that Irish banks would need a “huge increase” of additional capital if they adopted “unusual rules” on debt forgiveness that encouraged borrowers not to repay their loans.
“It would be grossly unfair to adopt a more lax attitude to debt forgiveness in respect of customers already in arrears, for example, and deny the same facility to customers who have worked hard to avoid arrears to date or who may ultimately fall into arrears in the future,” Masding said in an e-mail to members of an Oireachtas committee.
The e-mail was obtained by Bloomberg News. It authenticity was confirmed by a spokesman for the bank.
While the Government is close to introducing new personal insolvency laws, it has said it wants to ensure those who can repay loans should do so.
Permanent TSB has offered 17,332 customers various forms of mortgage forbearance, ranging from short-term reduced payment period to warehousing portions of loans for a period of time to make current repayments more affordable.
