Minister for Agriculture Michael Creed will meet Gerry Mallon, CEO of Ulster Bank, on Wednesday 29 June, to discuss the bank's sale of €100m worth of distressed agricultural loans to third parties.

As revealed by the Irish Farmers Journal last month, Ulster Bank is to sell €100m of agricultural loans as part of a total loan book sale of €2.5bn.

The agricultural portion accounts for 4% and relates to farmer customers who have distressed loans and who have been in communication with the bank in the past number of months.

It is important to emphasise that it doesn't impinge on the rights of the lender or borrower to sell the loans to a third party

Speaking in the Dáil on Wednesday 8 June, Creed said he will be meeting with Mallon on 29 June to discuss the sale of these loans and to "assist the farmers that are in this situation in so far as is practical".

He also said he will be asking the bank to show "forbearance" in how they deal with the farmers in this situation.

But he added that it is within the bank's rights to sell these loans to a third party.

"It is important to emphasise that it doesn't impinge on the rights of the lender or borrower to sell the loans to a third party".

Creed also said he will be meeting with the CEOs of the other banks during this month to discuss access to finance for farmers in the current income crisis.

"I will be raising all the issues that affect farmers, including farm borrowings, how banks are handling any current difficulties and what their plans are for the long-term when liquidity becomes more difficult," the minister said.

Creed criticises banks

Creed recently criticised the banks in the context of welcoming Glanbia's €55m advance payment scheme (GAP), a scheme that will offer interest-free cashflow support to member suppliers in periods when milk and grain prices are weak.

Speaking at the launch of the GAP scheme last Thursday, Creed said cashflow and the cost of credit in the farming community is not what it should be, and that Glanbia “continue to be a trailblazer” in that regard.

“We do not have an effective, functioning, competitive banking market, and what I would like to see out of this initiative is, hopefully, a competitive pressure being applied, particularly to the pillar banks, to step up to the plate. The cost of credit is too high, and it doesn’t stack up in the context of interest rates being charged across Europe."

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