Banks must play part in recovery

The banks need to do more to aid growth says a Parliamentary report
The banks need to do more to aid growth says a Parliamentary report

A high level report has asked whether the banks are blocking recovery instead of fuelling it.

The report released this morning by the Northern Ireland Affairs Committee at Westminster says the banks t need to play a more committed role but without a return to the aggressive lending practices which contributed to the current situation.

Among a series of observations the committee, comprising NI and GB MPs, says it was “most unsatisfactory” that Ulster Bank was not given the opportunity to comment on the “disturbing” findings of the Tomlinson Report into allegatioins of malprctice.

However, it adds: “the Bank’s refusal to respond to the Spotlight allegations could not fail to give the impression that it had something to hide”.

In general the repoert highlights a lack of any significant interest in lending despite the claims from the sector to the contracry.

“From the reckless high-risk attitude of many banks pre-financial crisis, the pendulum appears to have swung too far back in the opposite direction,” said committee chairman Laurence Roberston.

“Over the past year, the Northern Ireland economy has shown very welcome signs of recovery, with many new jobs recently being announced and the banks themselves showing a return to profitability.

“The banks needs to build on this. It is regrettable that banks such as FTB and Danske, have chosen not to participate in HM Government’s Funding for Lending Scheme, thereby potentially denying Northern Ireland further capacity for growth.

“The banks have assured us they are “open for business”: it is essential that they now put their money where their mouth is to help small businesses play their part in Northern Ireland’s economic recovery. We also believe that at the level of customer service and IT services need to improve considerably for banks themselves to really play their part.”

The report also attacks some banks it says have shown relatively little concern for their customers by pursuing plans to close local branches which is “not always appropriate for rural areas”

It also states there is cause for continued concern about the property market and the recent sale of NAMA and Ulster Bank property loan books, but there are clear, positive signs of signs of recovery in the economy which the banks need to capitalise on

In that context it calls on the Executive to “keep a close eye on the relationship between Cerberus, the partial successor to NAMA, and businesses in the province.”