Bank of Ireland has called on the new Government to put in place the Covid-19 Credit Guarantee Scheme for SMEs as quickly as possible.

The bank said it will facilitate loans through the scheme as soon as it is launched.

"Drawdowns from existing Irish government schemes – when adjusted to take account of the difference in the size of our economy – is at just 2% of UK volumes," said Bank of Ireland chief executive Francesca McDonagh.

"This highlights the very significant difference in approach between the two jurisdictions and puts Irish businesses at a competitive disadvantage," the CEO added.

Loan payment breaks from the banks and government wage subsidy schemes have cushioned the impact of the pandemic on businesses, but Ms McDonagh said the new Government needs to prioritise the Credit Guarantee Scheme as a matter of national urgency.

She also said that Bank of Ireland will not waive interest on the payment breaks provided to business customers.

She said the scheme needs to be user-friendly to be a success. "It is critical that the scheme works in a way that is as simple, straightforward, and user-friendly as possible – for both SME customers to get access to funding, and for banks to implement.

"Banks will be able to respond more quickly to customers if the scheme is constructed in a way that recognises that time is of the essence," she said. "This is something we have seen in other markets and it will be a very important element in the success of the scheme in Ireland."

Some lenders have introduced tighter checks on mortgages for those in receipt of State wage subsidies.

Bank of Ireland said it continues to process mortgage applications for customers who are on the schemes, provided affordability is not an issue.

Where income has changed, the bank said it is liaising with customers to understand their updated circumstances and assess if these are expected to change again in the future. 

This process has always been followed where income changes for an applicant, as it would not be responsible to provide somebody with a mortgage at a level that they will struggle to afford.

A small number of applications have been deferred but mortgages are drawing down daily for customers in receipt of the Government subsidy where overall sustainable affordability has been satisfied. 

Bank of Ireland has also seen cases where customers have asked to pause their applications as a result of temporary income reductions. 

The bank has announced a number of measures to support Ireland's economic recovery with a particular focus on housing, local enterprise and communities.

It has announced new funding of €1.4 billion for homebuilding and green investment "to ensure that the recovery is sustainable by encouraging home-owners and businesses to be more energy efficient".

The bank will inject €1m to local communities and a range of organisations over the coming months, which will be dispersed primarily through its "Begin Together" programme.

Bank of Ireland has specialist teams and a dedicated Covid-19 Hub to support customers who are concerned about being able to return to full repayments at the end their payment break.

The bank encourages any customer to make contact as soon as possible if they are concerned about the return to making loan repayments.

The bank said it has issued over 50% of all business loans under the SBCI Covid-19 Working Capital Loan Scheme since its launch in March.