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SME ratings up for 1st time since 08

Thursday, January 24 10:22:26

The financial stability and performance of Irish businesses has improved for the first time since 2008, latest figures from Experian reveal today.

A detailed analysis of over 50,000 of Ireland's most actively trading businesses, predominantly SME's, discovered that 2012 saw the number of positive credit events outweigh the number of negative events for the first time since 2008. A positive event is defined as at least a 25pc increase in the credit rating of a company.

Experian credit ratings are used by a range of financial institutions, insurers and credit departments to monitor for both warning and improvement signs in the business performance of customers and suppliers.

Encouragingly, the analysis also found that the amount of credit recommended to clients has also increased by 5pc when compared with 2011 figures.

Jim Kennedy, Head of Operations of Experian Ireland said, "SME's rely on credit for their survival so it is heartening to see a positive credit trend emerging in 2012."

"In effect, the increases in credit recommendations and positive credit events shows that Irish businesses are viewed as more stable both domestically and internationally, which will lead to more business confidence."

In 2012 Experian recorded 27,994 positive credit events compared with 2011 which saw 20,582 positive events. The ratio of positive to negative events increased from a low of 43pc in 2010 to 54.5pc in 2012. The total credit recommendations increased from E7.49 billion in 2011 to E7.85 billion in 2012.

The calculation of the Experian credit rating involves analysing financial statements, payment trends and both publicly available and self-supplied information to provide an objective, advisory view on the amount of credit risk associated with trading with any given business in Ireland.