‘Government must step in to stop sale of farmer loans to vulture fund’ – IFA
The government is being called on to step in and prevent the sale of Ulster Bank’s loan book to a “vulture fund”.
Tim Cullinan, the president of the Irish Farmers’ Association (IFA), has said that some 20,000 farmers who have dealings with the bank would be “left high and dry” if the bank’s loans were sold.
“It’s estimated that there are 10,000 farmers with borrowings from Ulster Bank, and a further 10,000 availing of current account facilities,” Cullinan pointed out.
Ulster Bank must make a commitment that it will not sell its loan book to a vulture fund that would leave these farmers completely high and dry. The government must intervene and prevent this from happening.
The bank’s parent company, NatWest (based in the UK), is said to be considering winding down Ulster Bank due to the effects of Covid-19 on its revenues and profits.
A decision on the future of Ulster Bank in Ireland is expected in the very near future.
Rose Mary McDonagh, the IFA’s Farm Business Committee chairperson, said that, if Ulster Bank does exit the Irish market, it must first facilitate existing customers to move to another full-service lender.
Ulster Bank must support its customers in moving to one of the other pillar banks in the state.
“Borrowers making repayments to a vulture fund have difficulties accessing new finance elsewhere because the fund will not release the security they hold… It’s neither appropriate, nor suitable, to transfer loans to vulture funds,” McDonagh argued.
“Ulster Bank’s departure would be another crippling blow to competition in the sector. Questions have to be asked of all stakeholders in the banking industry as to why the trend in reduced competition is allowed to continue unabated,” she added.