Belfast Telegraph

BBA boss quizzed by finance committee

Confusion still surrounds lending practices of banks to small and medium businesses in Northern Ireland after a terse Assembly session.

The finance and enterprise committees at Stormont took evidence from Eric Leenders, the executive director of retail lending of the British Bankers' Association (BBA).

The meeting was a follow-up to the September session when church leaders warned that "morally questionable actions" of banks in Northern Ireland were contributing to customers taking their own lives.

Alban Maginness MLA, chair of the committee for enterprise trade and investment, repeated comments from Enterprise Minister Arlene Foster, who last week said she was "frustrated" at banks causing a lack of confidence in the small to medium business sector.

Mitchel McLaughlin of Sinn Fein said the current relationship between banks and small businesses was "characterised by fear".

But Mr Leenders said that banks were "not immune" from the effects of the recession.

He added that a BBA taskforce has produced a 17-point plan for lenders to improve services, but said that not all of the points would be applicable to Northern Ireland, with its reliance on small to medium-sized enterprises.

He also denied the charge that banks are not lending to such businesses in Northern Ireland.

"I don't recognise this rhetoric around persistent decline of facilities for SMEs," he said.

He also denied that the BBA set lending terms for member banks in Northern Ireland, but admitted that they could be bound by regulations from their parent banks, which caused anger in the chamber.

David McNarry of the UUP said: "We are totally dissatisfied with the representation from local banks."

The DUP's Paul Girvan added: "I am not happy with what I have heard today as it has not answered any questions."

The committees urged the BBA, banks and politicians to get together to discuss and regionalise the organisation's action plan to the benefit of Northern Ireland businesses.

Meanwhile, it has emerged that SMEs in Northern Ireland are less likely than their counterparts in the rest of the UK to approach banks for overdrafts, loans or asset-based finance.

Research carried out by the CBI and Association of Chartered Certified Accountants polled almost 400 SMEs.