Lending slows at Strategic Banking Corporation as total loans near €1bn

SBCI made a profit last year of €495,000, reversing previous loss making position

“Longer term, our financial goal is to sustainably cover our costs, with any surplus generated to be re-cycled into further supports for SMEs,” SBCI chief executive, Nick Ashmore, said. Photograph: Dave Meehan/The Irish Times

“Longer term, our financial goal is to sustainably cover our costs, with any surplus generated to be re-cycled into further supports for SMEs,” SBCI chief executive, Nick Ashmore, said. Photograph: Dave Meehan/The Irish Times

 

Lending from the State-owned Strategic Banking Corporation of Ireland (SBCI) slowed in the second half of last year by 74 per cent as its total lending since inception neared €1 billion.

The SBCI lent €80 million to small and medium enterprises (SMEs) in the second half of 2017, down from €311 in the first half.

The average interest rate for SMEs last year was 4.4 per cent and the corporation’s lending now supports 53,389 jobs across the State.

An agricultural cashflow loan scheme made available €150 million to farmers last year while a Brexit loan scheme worth €300 million provided supported for business impacted by Brexit.

Loans to the agricultural sector made up the bulk of lending, at 26.1 per cent, with the wholesale and retail sector being awarded 13.2 per cent of all SBCI lending.

In terms of regional spread it was the south-west that received the largest portion of funding at 20.3 per cent of the total, while the midlands received the smallest volume with just 4.1 per cent.

Profit

The SBCI’s annual report released Friday shows the organisation made a profit last year of €495,000, reversing its loss making position from the previous year.

“This improved financial performance is due to increased interest income on funds drawn down by our on-lender partners, and the cost recovery from the SBCI’s role as operator and manager of the agriculture cashflow support loan scheme,” said Nick Ashmore, the company’s chief executive, in his yearly review.

“Longer term, our financial goal is to sustainably cover our costs, with any surplus generated to be re-cycled into further supports for SMEs,” he added.

Remuneration for Mr Ashmore dipped €2,000 in the year to €308,000.

The SBCI lends to SMEs through financial institutions known as “on-lenders”. These include AIB, Bank of Ireland and Ulster Bank. The organisation is planning to add new on-lenders this year.

Since its inception in 2014, the organisation has lent over €950 million. Its main sources of funding include the European Investment Bank, the Council of Europe Development bank and debt issued by the National Treasury Management Agency.