Concerns raised over €1.1 billion AIB loan sale – but family farm homes are safe

AIB today announced an agreement to sell a portfolio of non-performing loans worth €1.1 billion to a business consortium.

While the bank is believed to have assured that no family farm homes are included in the deal, concerns have been raised over the future of loans secured with farmland.

Commenting on the agreed sale, Irish Farmers’ Association (IFA) president Joe Healy said AIB gave a commitment to the farm organisation that any family farm homes would be excluded from any loan sales.

Healy acknowledged that this commitment had been met in today’s statement; but said he remained concerned that some investment loans secured against farmland may be included.

The president, along with Farm Business chairman Martin Stapleton, held a meeting with AIB last week and discussed a range of issues affecting the farming community, including the resolution of non-performing loans in arrears.

AIB advised that most farm borrowers in financial difficulty have engaged and have had loans restructured.

The bank also said it will not include restructured loans that are performing to agreed terms in any future potential loan sales.

AIB assured the IFA that it will continue to implement sustainable solutions for customers in financial difficulty where they engage with the bank.

Farmers experiencing difficulties with banks can contact the IFA Debt Support Service, the farming organisation advises.

Calls for state intervention

Meanwhile, Shane O’Loughlin, chairperson of Irish Creamery Milk Suppliers’ Association’s (ICMSA’s) Farm Business Committee also described the loan sale as “hugely concerning”.

A bank that is majority owned by the state has decided to sell loans at a discount to a third party and the individuals involved are now left at the mercy of this third party

O’Loughlin said it is essential that people whose loans have been sold are informed immediately.

“Indeed, some individuals had made proposals to restructure their loans to AIB which were refused by the bank. In the interest of transparency, people should be told at what discount rate their loan was sold.

Given that the state rescued the bank, the details of the sale of these loans should be published. The individuals involved should have been given the right to purchase these loans at that rate.

“The reality it would appear is that the banking sector is intent on cleaning up its balance sheet without any regard to the individuals involved.

“It is about time the state intervened on these people’s behalf,” he concluded.