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The Irish Farmers Journal understands that up to 100 farms are included in the recent loan sale by AIB to Everyday Finance, an affiliate of so-called US vulture fund Cerberus. It is one of the largest single tranche of farm loans sold by an Irish bank since the recession.
Based on the average figures provided by AIB at the time of the loan sale, the farm loans are worth an estimated €44m.
However, it is understood that farm loans are typically worth more than the average figure due to the value of land, with most loans sold at 20% of their value.
A number of farmers have already received letters informing them that their loans have been transferred to the vulture fund, with more letters expected in the coming week.
AIB previously stated that the loan sale announced on 1 April had “limited agriculture exposure” and that the bank had made every effort to engage with customers.
IFA farm business chair Martin Stapleton said the news of the AIB farm loan sales “leaves AIB’s reputation as a pillar bank that farmers can do business with in good faith on the brink.
“AIB say they are ‘backing brave’ when it comes to offering lending facilities to farmers, but when true courage is required, they have been marked absent.
“Among the loans that have been sold are ones where the IFA has been involved in negotiations, where the farmer for their part was willing to commit to full repayment over an agreed timescale.
“These loans should not have been sold to a vulture fund. This breaks the fundamental principles that the IFA has established for negotiated settlement of impaired loans.”
When asked if he believed the agri-loan division of AIB was behind the sales, Stapleton said it seemed that a small group within AIB, outside the agri division, was undermining AIB’s reputation by its actions.
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