The Small Firms Association has said the potential departure of KBC Bank Ireland from the Irish market would add to the anxiety of small business owners in their efforts to access finance to re-open post-pandemic.
The director of the SFA Sven Spollen-Behrens told the Claire Byrne show that access to finance and loans is critical to small businesses, who would be seeking liquidity and working capital loans.
Mr Spollen-Behrens said that the lack of competition is a real concern as SME lending costs in Ireland are two-and-a-half times higher than the eurozone average.
He said that with just AIB, Bank of Ireland and Permanent TSB remaining in Ireland, "we dont see this improving any time soon".
He said that for businesses that are closed "the pathway to re-opening is becoming more cumbersome by the day".
Meanwhile, the Irish Banking Culture Board (IBCB) has said the announcement by KBC is a "significant" and "potentially disappointing" development for the Irish banking market.
The board is an independent industry initiative established and funded by the five retail banks in Ireland, with the aim of rebuilding trust in the sector.
In a statement, it said the IBCB recognises that it is a concerning day for the staff and customers of KBC in Ireland, which is a member of the IBCB.
"The focus of the IBCB will be to work closely with our member banks KBC and BOI to ensure that any outcome of their negotiations is managed in an open and transparent manner and that staff and customers are treated with fairness and respect throughout; applying the principles of good culture at this time is critical," the statement said.
