Bank in launch of £50m fund to help smaller firms

Allied Irish Bank (GB), which announced the creation of the fund yesterday, operates from 21 locations in major cities across Britain, including in Leeds, and employs more than 700 staff. Regional director Dominick O’Grady said the business bank is seeing “an uplift in demand” from companies who seem increasingly confident about the outlook for growth.

He added: “While it may be too early to say the tide has turned, we’re experiencing a steady rise in enquiries for financing support across many local business sectors including healthcare, leisure, professional services and manufacturing.”

The bank said it will waive arrangement fees on finance up to £10m agreed by December 31 and drawn down within 60 days of the offer letter. Head of GB business Gerard O’Keeffe said: “Many business lending initiatives are failing to connect in the UK because banks are not taking into account the diversity of the so-called SME sector.

“We deliberately made this a targeted programme because we know owner-managed businesses especially well, and as the engine of the economy, we want to make it as easy as possible for them to access capital and expand their businesses. Both the British and Irish governments have launched schemes to provide access to finance for businesses and as a specialist business bank in Britain, we are eager to play our part in that.”

Mr O’Grady added: “Our loan book is fully funded by customer deposits and we are very pleased that we can use this to support more owner-managed businesses and professional practices in the North and West by lending to help them grow.”

Allied Irish Bank (GB) is a trademark used under licence by AIB Group (UK) plc, a wholly owned subsidiary of Irish state-owned Allied Irish Banks (AIB).

In August, AIB announced it had trimmed its half-year losses by over a quarter and returned to operating profits, excluding a big charge for impaired loans, as job cuts and reduced funding costs began to feed through.

During the financial crisis, AIB cost taxpayers more than 20 billion euros – the most handed out to any Irish lender still open. Over the past year it has shut branches and cut its staff numbers in a bid to make an overall profit by 2014.

AIB announced an after-tax loss of 758 million euros for the six months to June.

After excluding a provision of 738 million euros for impaired loans, however, the bank made an operating profit of 162 million euros.

AIB also said in its results that there were some positive trends emerging in loan demand from SMEs.