The Government needs to revisit the establishment of a State bank for SMEs, particularly in light of Ulster Bank’s decision to exit the Irish market, according to Denis Naughten TD.
Denis Naughten pointed out that at present Ulster Bank has approximately 15 percent share of the mortgage market, 20 percent of SME lending and a strong corporate banking business and, as a result, its exit from the market will result in less competition for consumers.
He called on the Government to re-examine the introduction of a State bank and possible delivery mechanisms for community banking to be implemented in Ireland.
“We need to examine whether this could be done through An Post or the local Credit Union network, both of which have infrastructure, facilities and visibility in our communities,” said Denis Naughten.
“A new State bank offering low interest rates without personal guarantees is now required to support both businesses and communities as they begin to reopen when we emerge from lockdown. What is needed is a customer focused bank that will provide Green Finance to homeowners, landlords and businesses to invest in a sustainable future.”
Before the pandemic 250,000 SMEs accounted for 99.8% of total enterprises and 65% of total employees.
“SMEs are the backbone of the country and it is vital that they get up and running again but they will need supports. They have been the backbone of communities across the country and can be once again, with the right backing,” added Denis Naughten.
The decision by Ulster Bank to exit the Irish market has presented an opportunity for this Government to be innovative and examine the possibility of introducing a State bank.”