SMEs boosted their borrowing slightly in Q2 2021, according to the Central Bank, but even so total SME bank credit declined in the quarter to the lowest level since reporting began.

The outstanding stock of SME credit on the balance sheets of Irish banks decreased during Q2 2021 by 0.6% to €19.3 billion, the lowest outstanding stock reported since the series began. This included €6.4 billion relating to property and €12.8 billion of core SME credit.

Net lending to SMEs was down €107m in the quarter. Annually, repayments exceeded new lending by €209m over the year to end-June.

Gross new lending to SMEs rose by 4.1% €1.1 billion, mostly driven by property-related sectors.

The total outstanding amount of credit to all Irish resident private sector enterprises, both SMEs and large enterprises, stood at €65.9 billion, the lowest level of outstanding credit since the series began.

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However, credit advanced to core private-sector enterprises increased by €349m, the first increase in two years. In annual terms, credit to all core enterprises decreased by €1.9 billion or 6.7%, to €25.4  billion at the end of June.

Net lending to large core enterprises was €338m, while annually repayments exceeded drawdowns by €1.9 billion.

Deposits from all Irish private sector enterprises continued to grow for most sectors, increasing by €4.5 billion over the quarter and €19.9 billion over the year. Deposits from enterprises engaged in core sectors increased by €1.9 billion to €71.9 billion at the end of June.

The Central Bank said that the recovery in lending was uneven across economic sectors, with the manufacturing and property-related sectors (construction and real estate) recording the largest increases in gross new lending.

These were among the sectors that had seen the largest declines in gross new lending when Covid restrictions were first introduced in 2020. 

Many service-based sectors have seen a slower recovery in lending activity, with lending to sectors such as hotels and restaurants still far below pre-pandemic levels.

There are full details here, including an extensive set of business credit and deposits tables and previous releases, plus explanatory notes.