Bank of Ireland said it approved around €2.1bn worth of new credit for SMEs in the first half of 2014, up 7% on the same period last year.

This figure includes new and increased lending, but does not include restructures.

The bank said there was a particular increase in both applications and approvals from the agriculture sector as it prepares for the abolition of milk quotas in April of next year. 

The bank also reported that there has been an uplift in the overall motor market, with growth of 28% in the first half of the year, and an increase in property related approvals. 

Last month a Central Bank SME Market Report noted that the outstanding balance of lending to SMEs has been steadily falling since 2011 and that gross new lending was showing no signs of a discernible upward trend among all major sectors of the economy.

Within the report, SME credit demand was shown to have fallen slightly in the year to March 2014. 

Credit demand was shown to be non-expansionary in nature, with demand for working capital and restructuring purposes outstripping that for investment or growth purposes.

In Bank of Ireland's latest figures, it reported that over 85% of credit applications from SMEs in the year to end June have been approved.

This compares to a 20% rejection rate recorded in the Central Bank report, which noted that credit supply conditions had eased between 2011-2014 across the board.

Commenting on the announcement Michael Lauhoff, Bank of Ireland's Head of Business Banking Growth, said: 

“We are seeing some very encouraging signs of increased demand from our business customers.  Whilst some of this activity can be attributed to some competitors leaving the market, we are also seeing some positive signs of renewed investment in key sectors of the economy."