Irish Farmers’ Association (IFA) president Tim Cullinan has said NatWest must make a commitment that Ulster Bank’s loan book will go to ‘pillar’ banks that can offer a full service to customers.
It follows the announcement today (Friday, February 19) that NatWest Group will wind down Ulster Bank in the Republic of Ireland following a phased withdrawal.
Also Read: Ulster Bank to begin phased withdrawal from IrelandIt is estimated that there are 10,000 farmers with borrowings from Ulster Bank, and a further 10,000 availing of current account facilities.
An agreement for the potential sale of Ulster Bank’s commercial loan book to AIB has been reached, but is subject to approval and further negotiation.
‘Moral responsibility’
The IFA said that the withdrawal has “significant consequences” for competition in the sector, and that the first priority must be to “ensure that the loan book ends up with a bank that provides a full banking service and not a faceless fund”.
“NatWest has a moral responsibility to its customers to ensure this does not happen,” Tim Cullinan said.
It is positive to learn of the engagement NatWest is having with AIB and PTSB. It’s vital that NatWest respects its long-standing and loyal customers in any sale decision it makes.
IFA Farm Business Committee chairperson Rose Mary McDonagh welcomed NatWest’s intention to facilitate existing customers to move to another full-service lender.
“NatWest / Ulster Bank must support its customers in moving to one of the other pillar banks in the state,” McDonagh said.
IFA has repeatedly highlighted that it’s neither appropriate, nor suitable, to transfer loans to faceless funds.
Competition
McDonagh added that Ulster Bank’s exit will further “erode the diminishing competition” in the sector.
“Ulster Bank’s departure [will] be another crippling blow to competition in the sector. The lack of choice for borrowers will further drive up the cost of borrowing in Ireland.
The bank plays a critical role in agri-lending, accounting for approximately 16% of the market share in agri-customers. The bank’s exit will see the loss of 88 branches and over 100 ATMs around the country.
“Furthermore, Ulster Bank is an active participant in any SBCI [Strategic Banking Corporation of Ireland] schemes which came on the market and its departure will be a devastating loss to its customers and farmers alike,” McDonagh added.
“Ulster Bank has a duty of care to its existing customers, so it must quickly reverse the lack of engagement on the issue and reduce the stress for existing customers.”
Ulster Bank has almost 2,500 staff working in branches across the Republic of Ireland.