The Irish Hotels Federation (IHF) has expressed serious concern that the decision by Lloyds Banking Group to wind down Bank of Scotland (Ireland) and cease to provide working capital by the end of the year will put up the future of 150 hotels in Ireland under threat.
Reports have pointed towards the Gresham Hotel in Dublin amongst other high-profile hotels around the country which may face difficulties.
Bank of Scotland (Ireland) is a major lender to the Irish hospitality industry with loans in excess of €2bn to the hotels sector. Mr Paul Gallagher, President of the IHF stated, “In addition to long-term loans, the existing package of facilities provided by Bank of Scotland (Ireland) to our members includes vital seasonal funding to carry them through the quieter winter period.
Unilateral withdrawal of these working capital facilities at the end of December would be catastrophic, particularly at a time when other banks are reluctant to take on new customers and when asset securities would continue to be held by Bank of Scotland (Ireland).
“The Federation is calling on Bank of Scotland (Ireland) to confirm that they will honour their responsibilities to hotel customers and make available the necessary ongoing working capital facilities until such time as each customer can procure, in an orderly, manner alternative banking facilities. The Government and regulatory authorities also have an obligation to protect the economically important hotel sector from being at the mercy of the unilateral withdrawal of such vital facilities,†concluded Mr Gallagher.
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