Northern Ireland manufacturers look set to miss out on a £1bn finance fund established by Royal Bank of Scotland to support the sector.
RBS, which is 84%-owned by the taxpayer, said it will offer manufacturers loans between £250,000 and £25m at discounted rates and arrangement fees, with the option to defer capital payments and pay interest only for up to three years.
However, the bank’s local unit, Ulster Bank, will not receive a share of the dedicated fund, which has been launched as banks face calls to lend more and help lift the economy out of the recession.
In a statement, Ulster Bank said lending to local industry was covered under its share of a £3bn small business fund established by RBS in February last year.
It said: “Ulster Bank welcomes the announcement by RBS today of a £1bn fund to help manufacturing businesses. In Northern Ireland, the funding requirement for local manufacturers continues to be provided for within Ulster Bank's £250m Regional Fund for SMEs, announced last year. We will continue to keep the requirement for a dedicated manufacturing fund under review.”
The province’s manufacturers have been among the hardest hit in the recession, with Northern Ireland Manufacturing estimating 70% of jobs lost here last year were linked to the sector.
Official figures earlier this week showed that the sector's output failed to grow for the second month in a row in November, although the annual rate of decline has eased to its lowest since the financial crisis began.
Peter Ibbetson, chairman of RBS, said: “We want to ensure we are doing everything we can to assist the sector as conditions begin to improve.
“As we see many of our manufacturing customers turning their thoughts to investment in order to drive competitiveness, we want to send a clear message of support to them by creating a fund that is designed specifically to enable that investment.”
The fund represents less than 10% of RBS's existing commitments to the sector and is likely to go only a small way towards meeting demand for affordable finance among struggling businesses.
Part-nationalised RBS and Lloyds Banking Group have already admitted they are short of Government targets to lend to businesses.
Under the new scheme, manufacturers will be able to access loans on two and three-year fixed rates of 3.4% and 4.3% respectively, with fees of 0.75%.