Annual Spring Conference May 19-20, 2016 Dublin, Ireland 1 2009 IACPM Managing SME Portfolios - Balancing Risk and Growth Speakers: Tom Fee, Head of Credit, Bank of Ireland Deirdre Hannigan, Chief Risk Officer, Ireland NTMA Chris Loring, Head of Lending Products, Lloyds Moderator: Marcia Banks, Deputy Director, IACPM
Agenda Introduction and overview Ireland National Treasury Management Agency Lloyds Banking Group Commercial Banking SME Bank of Ireland Small and Medium Enterprises Panel Discussion Q&A 2
National Treasury Management Agency (NTMA) ( 7.9bn at end
NTMA Governance structure Minister for Finance Banking Unit (seconded from NTMA) NTMA Agency/Board NTMA CEO SBCI Board SBCI CEO NAMA Board NAMA CEO Conor O Kelly Nick Ashmore Brendan McDonagh FDM ISIF NDFA NewERA SCA SBCI NAMA Shared corporate functions* *Certain corporate functions not shared with NAMA
Ireland Strategic Investment Fund Ireland Strategic Investment Fund commitments to date Water Infrastructure Energy SME Food & Agri Real Estate 2.3bn committed to date? Venture Direct Equity Other
Ireland Strategic Investment Fund SME sector investment SMEs central to economic growth SME Sector Finance Solutions Equity Mezzanine Credit Historical overreliance on bank debt DEBT - Focus on alternative credit products unitranche or niche EQUITY investment in funds or directly in businesses ISIF commitments of 422m to date
Irish SMEs Strategic Banking Corporation of Ireland s (SBCI) Target Market and Distribution Enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50m and/or an annual balance sheet total not exceeding 43m. Firm size (employees) Number of enterprises % of total Number of engaged* % of engaged All active enterprises 185,530 100.0 1,219,854 100.0 SMEs 185,049 99.7 micro (1-9) 168,281 90.7 323,502 26.5 small (10-49) 14,361 7.7 274,902 22.5 medium (50-249) 2,407 1.3 230,641 18.9 Large (250+) 481 0.3 390,809 32.1 *Persons engaged include employees, proprietors and family members Source: CSO Business Census 2012
SBCI Key Objectives Reinforce Ireland s economic recovery by improving funding and access to finance mechanisms for the economy Financial Greater volume of Funding Reduction in interest costs New options for Risk Sharing - Improve access to Finance Targeted measures to address specific market failures Flexible platform to access support from Europe Competition Greater diversity of Finance offerings Encourage New Market Participants Assist with the growth of smaller credit providers Create a new arena for competition in the use of SBCI Funds
SBCI on-lending to date December 2015
LLOYDS BANKING GROUP COMMERCIAL BANKING SME BUSINESS 19% UK MARKET SHARE 930 RELATIONSHIP MANAGERS SUPPORTING CLIENTS ACROSS THE UK 1.5BN NET INCREASE IN LENDING TO SMES YEAR ON YEAR HELPING BRITAIN PROSPER LOCAL & INDUSTRY BANKING SPECIALISTS Supporting all business sectors Dedicated specialism in six sectors: Manufacturing, Healthcare, Education, Real Estate, Professional practices, Agriculture Local lending discretions National and international reach WE RE COMMITED TO INCREASING OUR BUSINESS MENTORS TO 1,800 WE RE COMMITED TO LENDING BRITISH MANUFACTURERS 4BN WE VE BEEN VOTED BEST BUSINESS BANK FOR THE LAST 11 YEARS * 8 OUT OF 10 OF LOAN AND OVERDRAFT APPLICATIONS APPROVED WE PROVIDE F2F RELATIONSHIP BANKING FOR >100k CLIENTS 50k TO 12.5MN LOAN TICKET VALUES 1 TO 25 YEAR LOAN TERMS * FDs Excellence Awards in association with ICAEW and supported by the CBI and Real Business. For more information, visit lloydsbank.com/bank of the Year Lloyds Banking Group figures correct as at 30 September 2015. 8 out of 10 relates to period April 2012 to Sept 2015. The Lloyds Banking Group includes companies using brands including Lloyds Bank, Halifax and Bank of Scotland and their associated companies. More information on Lloyds Banking Group can be found at lloydsbankinggroup.com 10
Small & Medium Enterprises The SME Market in Ireland It is estimated that there are c. 200,000 SMEs in Ireland Stock of Non Property SME Lending 18bn in 2015. New SME Non Property lending in the market 2.6bn in 2015 3 Key Sectors make up a large proportion of new lending (Agri 28%, Retail/ wholesale 20% and Business and Admin Services 10%) Key indicators in the SME market are: GDP 2015 7.8%; Unemployment 8.4% Confidence is starting to re-emerge; at a faster pace in some sectors; more pronounced in cities Credit demand still subdued, but 20% of SMEs are planning to borrow in 2016 for working capital, new equipment and growth. Access to Credit still considered a concern by some SME s Some infrastructure concerns such as broadband in rural areas Bank of Ireland BOI Group Customer loans Dec 15 c 85bn total with circa half in Republic of Ireland (ROI) Largest branch network with 244 branches in Ireland. Largest lender to the Irish economy in 2015. Market share of the flow of SME lending (Non Property) in 2015 of 53%. BOIG Supporting our SME customers: Extensive sector expert team including Retail, Property, Agri, Hotels. Direct Telephone Lending for small business customers for < 100k ThinkBusiness.ie: a dedicated online resource to support customers Supporting Government initiatives such as the SBCI Scheme, Credit Guarantee Scheme, and MFI Enterprise Programme including National Enterprise Week, Enterprise Towns, Start- Up Labs, Sponsor for a Day initiatives. Economic Pulse 11
Annual Spring Conference May 19-20, 2016 Dublin, Ireland 12 2009 IACPM Managing SME Portfolios - Balancing Risk and Growth Speakers: Tom Fee, Head of Credit, Bank of Ireland Deirdre Hannigan, Chief Risk Officer, Ireland NTMA Chris Loring, Head of Lending Products, Lloyds Moderator: Marcia Banks, Deputy Director, IACPM