• Comprehensive SME survey shows development of medium sized businesses critical for future economic growth
• Bank revises business lending drawdown forecast for year up to €7.1bn

Bank of Ireland Business Banking today reported that its growth strategy announced in June has yielded strong results. The strategy is aimed at capitalising on the increasing importance of the SME sector to the Irish economy with all indicators suggesting that indigenous business is now as important as inward investment.

Business Banking has also completed the most comprehensive survey of Irish SMEs this year that focusses on the long term outlook for this sector. It highlights Business Banking’s positioning opposite competitors in terms of market share and other key indicators.

Ø Business Banking’s term lending drawdowns for March '06 is expected to be €7.1bn, having increased by 100% in the last 2 years.

Ø Bank of Ireland is now outperforming its competitors on lending decision speed, cheque issue speed, interest rate deals, relationship management and lending terms and conditions.

Focusing specifically on the SME sector the survey suggests that, while the short-term outlook for SMEs is buoyant, increased emphasis must be placed on ensuring that small businesses make the transition to medium enterprises if the sector is to sustain wealth creation and continue to drive economic growth.

Only 3% of Irish SMEs are medium size with more than 50 employees. Overseas expansion and exporting are dependant on businesses growing to a medium sized enterprise, yet the research indicates that only 7% of Irish SMEs intend to expand abroad in the next twelve months. This contrasts sharply with the UK where medium enterprises, which employ 30% of the workforce, are the powerhouse of the economy.

Bank of Ireland has therefore shaped its offering to facilitate the establishment of small business and to nurture their development in to medium sized businesses. Since its strategy was announced in June, this has included the appointment of 40 dedicated SME business managers nationwide, the appointment of key sector specialists targeting intermediaries and the franchising sector, a dedicated start up package, a simplified and quicker lending process and an increased focus on major commercial centres throughout the country.

Commenting today on Business Banking’s progress and the importance of medium sized enterprises Cathal Muckian, Director, Bank of Ireland Business Banking said: “The strong performance of our business is testament not only to the effectiveness of our own strategy, but it also reflects the obvious buoyancy and activity in the SME sector which we are capitalising on. In the long term, to ensure that SMEs continue to be a key driver of the economy, the growth of medium size enterprises must be fostered. In this context, the recently established Small Business Forum has a critical role to play. We have made a number of recommendations to the Forum suggesting the establishment of a national strategy focused on SME start-ups, a strategy to assist smooth business transfers, a programme to support early growth SMEs seeking to export, the establishment of an SME loan guarantee fund and a SME technology support programme. Each one of these recommendations is geared toward encouraging business start-ups and facilitating their evolution into medium sized businesses. This is critical if the SME sector is to sustain its current position as a key driver of the economy and also shapes our long-term agenda”.