Gross new lending to small and medium-sized businesses jumped in the third quarter on the back of increased funding to the property investment and development sector, new figures show.
According to data from the Central Bank, new lending to SMEs was €359 million higher in the period July to September versus the same quarter a year earlier.
Property-related lending accounted for 44 per cent of outstanding credit to SMEs in the third quarter and for 40 per cent of new non-financial draw-downs. Although property-related lending represented the largest share of outstanding SME credit, in annual terms, such loans declined by 13.6 per cent, with firms repaying €2.3 billion more than was drawn down in funding.
New lending to non-financial, non-property related businesses rose by €78 million to €671 million, the figures reveal.
Large outflow
Deposit flows from all non-financial private-sector enterprises increased by €242 million versus the same quarter. After robust inflows in the first half of the year, there was a large outflow in the manufacturing sector, the Central Bank said.
Bank credit to all SMEs declined for the 20th consecutive quarter, falling by 4.3 per cent to stand at €30.9 billion, down 11.7 per cent on an annual basis.
The outstanding stock of SME credit includes €13.5 billion relating to property, €17.3 billion of non-financial, non-property credit, and €129 million of financial intermediation credit.
The total amount of credit outstanding to all Irish private-sector enterprises on the balance sheet of resident credit institutions was €102.6 billion at the end of the quarter.
Deposits from private-sector enterprises increased by €163 million in the 12 months to September to stand at €87.2 billion, up 0.2 per cent.
