Local bank managers get more discretion in lending, says AIB boss

By DAVID BURKE BANK LOANS of up to €25,000 can now be approved within 24 hours, AIB Chief Executive David Duffy said in Galway last week. The CEO was on a visit to meet branch staff and customers in Galway as part of a process which he says is transforming the way the bank does business. Mr Duffy was appointed to head the bank, which is wholly owned by the State, in 2012, and he told journalists that it had been restructured more comprehensively than any other Irish bank. He added that the bank had approved €4.8 billion in credit facilities to SMEs (small and medium enterprises) across the country last year, significantly exceeding the €3.5bn Government target. â€Å“Critically for SMEs, since the end of 2012 AIB has in place a fast track process of lending to allow credit approvals of up to €25,000 to be made in branches by next business day.â€Â[private] Questioned about the perception that all discretion had been taken from local management, Mr Duffy said that in the wake of the financial crisis, control and regulation had been centralised. Now it was time to start giving discretionary lending back to the branches. Mortgage arrears With 33,000 mortgages in arrears, he said the bankâ€â„¢s aim was to stabilise the situation in the short term. A plan is in place to have engaged with every mortgage holder in arrears by the end of 2013, and the bank is on track to achieve that, he said. However some people will not talk to the bank, and they would have to go down the legal route in these cases, he said. On the future of branch banking, Mr Duffy said that in three to five years 95 per cent of retail banking would be done on-line. However, there was still a need for local advice, and this was where the branch network came in. There are, for instance, mortgage co-ordinators in every branch to support customers through the mortgage process. AIB plans to lend at least €2bn in the Irish mortgage market in 2013. The bank estimates that it provided 45 per cent of all mortgages in Ireland in 2012 and approved seven out of ten completed mortgages in that year. Mr Duffy said, â€Å“Supporting our customers with their financial needs is critical to the Irish economy for the maintenance and creation of thousands of jobs locally. Since I joined AIB last year I have been meeting with customers and staff throughout the country and I am encouraged to see the resilience and innovation shown by business through these challenging times. â€Å“AIB is working hard to provide credit to fuel these businesses in order to stimulate economic activity and help keep jobs in this region.â€Â[/private]