AIB tells farmers it will support them through difficult times
AIB is committed to supporting farmers through volatile periods, its Director of Retail and Business Banking Bernard Byrne has said.
Speaking at the bank’s agri outlook briefing in Mullingar, Byrne said AIB understands the volatility of the business.
“When we look at it, we know that both on farm and off farm there are going to be serious factors influencing farmer’s incomes over the next while.
“Things are going to be more volatile rather than less volatile and that is going to be influenced by local factors and international factors as the sector has become more global,” he said.
According to Byrne, AIB’s objective is to make sure that it is there to support farmers through those difficult periods of time.
He said AIB has taken long term views in respect of the pricing in all sectors so that it can get through short-term pricing issues.
“When times are very good and prices are very high we will not be using that all the way through the cycle but similarly when prices are low we will take an average view of were that is going to be to support farmer’s long term cash position.
“We are here to support farmers,” he said.
40% of AIB SME lending was to agriculture in 2014
On the night, Byrne stressed to farmers that the agri sector is the most important sector to AIB.
“Some 20% of our total SME balances are to the agri sector, 40% of all Irish lending into the farming sector is from AIB, it’s a huge part of our business,” he said.
Byrne said 2014 was a year where there was significant demand for credit from the dairy sector primarily.
“There was €250m of drawdowns in 2014 which is a very significant level of debt draw down during the period.
“It was 21% of our total drawdowns to SMEs took place in agriculture,” he said.
According to Byrne, the demand was driven across a range of areas including land purchases, farm buildings, equipment, machinery and stocking.
“While dairy has been the largest part of it there has been significant support across the board for all sectors in the farming industry,” he said.