BANK REGULATION TO BE 2013'S BIG ISSUE - Bank of Ireland said yesterday it has passed €3.5 billion in loans to small business, and will exceed lending targets set by the Government by the end of the year. AIB earlier said it already hit its target and claims it will have lent €3.75 billion in credit by the end of this month. Next year the target will increase to €4 billion a year.
John Finn, of Treasury Solutions, says recent data has shown that lending to SMEs was down 4.9% or €1.3 billion in the year. He says the data suggests that levels of debt generally is still falling. He also points out some anomalies in the lending patterns, saying that there is 30% more lending to property related SMEs even though non-building companies would provide a lot more employment. Mr Finn also says that businesses could be shifting their loans from non-Irish banks to the likes of AIB and Bank of Ireland and so this would not be a benefit to the economy as a whole. Linked into the whole lending problem is the regulation of the banks, which will be a big issue in 2013 on an international basis. He predicts that the availability of trade finance internationally will get more expensive, while it will also impact on foreign exchange. When you have an open economy like ours which is so open to trade, this could hit SMEs hard, he explains.
Mr Finn says the ending of the bank guarantee will not have any major effect as the ECB remains the provider of funding of last resort. He says the country's functioning banking sector has reduced funding from the ECB in recent months. Looking ahead to 2013, Mr Finn says that macro issues will affect banking and lending and a lot of stuff will be beyond our control. He says that while the future of the euro may still be in doubt, he predicts it will be OK.
MORNING BRIEFS - Four Irish people have made it onto this years "30 under 30" - the list from business magazine Forbes. The magazine's seal of approval is one of the most-sought-after in business. This year's list includes Limerick entrepreneurs Patrick and John Collison - Patrick won the Young Scientists' Exhibition in 2005. The brothers sold their business for $3m in 2008 and now run online payments firm Stripe. Also on the list is computer programmer James Whelton who co-founded CoderDoJo - the free scheme to encourage children into computer programming, which now runs in 22 countries. Jonathan Cloonan of advertisers Group M was named in the marketing and advertising category. The list, which began last year, claims to highlight the "young disruptors, innovators and entrepreneurs" that are changing the world.
*** Shares in Total Produce rose sharply yesterday after the fruit and vegetable firm announced it was buying a 65% stake in Canadian firm Grandview Ventures, which trades as the Oppenheimer Group. The deal sees Total Produce taking a 35% stake next month and another 30% stake in 2017. Total Produce shares are up by nearly 60% over the past year, and advanced another 2% yesterday.
*** The International Monetary Fund has said Ireland could delay some of the budget cuts required under its loan programme if the country's economy grows more slowly than expected next year. The lender said Ireland has so far shown "steadfast policy implementation" with its conditions, despite slower growth this year. The IMF's board has agreed to disburse €890m of aid to Ireland after complying with the conditions of its bailout, bringing the total given so far to €19 billion.