Lack of competition in the State's banking sector is costing the country's small businesses millions of euros a year, a lobby group said on this afternoon.
ISME, which represents small and medium-sized enterprises (SMEs), said its members were being charged the highest interest rates in Europe, with Irish rates at 8.9 per cent compared with between four and six percent in other countries.
"Put another way, Irish SMEs are paying 78 per cent more for finance than their European competitors," said ISME Chief Executive Mark Fielding. "It's off the wall - someone landing from another planet would just not believe this stuff."
In a report, ISME pointed out that the country's two biggestfinancial players - Allied Irish Banks and Bank of Ireland -accounted for 77 per cent of SME business and were racking upsome of the highest profit levels in Europe.
Irish banks were posting an average return on equity (ROE) of 22.5 percent - some 35 per cent more than the European average of 16.4 percent, it said.
ISME called on the Competition Authority to investigate the high costs involved in changing banks, excessive charges and high rates.
Allied Irish and Bank of Ireland, along with Irish Life &Permanent and Ulster Bank, a unit of Royal Bank of Scotlandbetween them control nearly three quarters of Irish domesticfinancial assets.
The Irish Bankers' Federation, which represents more than 50financial institutions in Ireland, said it was studying the ISMEreport and would respond in due course.