ISME research seriously misrepresents the state of SME lending, says IBF

The Irish Banking Federation (IBF) seriously questions the representativeness and the accuracy of the latest research by ISME among its member on lending to SMEs.

The only authoritative, independent research undertaken in this area is that commissioned by the Government from Mazars and published in April. This shows principally that eight out of ten credit applications were approved, bringing total credit outstanding to the SME sector to €32.2 billion. The Mazars results also show that around one-third (35%) of all SME loans are currently in the watchlist/impaired category (that is, 30 days or more past due) – a key factor in accounting for strains in the supply of credit to SMEs.

The Credit Review Office has been established by Government as an ongoing appeals process for business credit applications that have been rejected by banks. This Office is due to publish its first set of figures very soon and IBF believes that these will simply not reflect the ISME representation.

IBF Chief Executive, Pat Farrell states:
“Banks are committed to supporting viable businesses through these challenging times and the focus has to always be on the key issue of viability. At a time when the IBF, our member banks and the other SME business representative bodies continue to work with Government and all relevant stakeholders to provide the support that sustainable businesses need, it is particularly unhelpful that ISME produces misrepresentative information like this which does little or nothing to promote confidence.”

The Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Further Information: Felix O’Regan, Head of PR and Public Affairs, IBF, tel. 6715311, 087 6481644

APR for Credit Cards must include cost of Government Stamp Duty under new EU Consumer Credit Directive

CCD comes into force here on 11 June 2010, the APR (Annual Percentage Rate of charge) for credit cards must now include the cost of the government stamp duty on credit cards which currently stands at €30 per credit card account per year.
Prior to 11 June, the calculation of the APR for a credit card was made up of interest, fees and charges excluding government stamp duty.
Post 11 June, the calculation of the APR will be made up of interest, fees and charges and government stamp duty. This will mean that credit card APRs in the Republic of Ireland market will have to be recalculated to include the government stamp duty and this will affect the advertised APR for a credit card. However, this recalculation, of itself, will not change the cost of the credit card to the cardholder.

Consumers wishing to have a credit card should shop around for the product that is most suitable to their requirements in terms of price, service, convenience, etc – as with all banking products/services.

IBF is informing consumers of this development through the media and through its website. IBF-member credit card issuers are preparing information for their customers on this matter.

IBF and its members have long campaigned – and will continue to campaign – for the reduction/abolition of stamp duty on credit cards and other payment cards.
Customers are advised to contact their credit card issuers with any further queries.

Notes 
The Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Further information: Felix O’Regan or Louise O’Mahony at IBF, tel. 6715311