As revealed by the Irish Farmers Journal on Wednesday, Ulster Bank is to sell €100m of agricultural loans as part of a total loan book sale of €2.5bn. This relates to farmer customers who have distressed loans and who have been in communication with the bank in the past number of months.

Expressing its concern, the IFA says Ulster Bank must continue to engage with genuine farming customers. Following IFA meetings with Ulster Bank in March and April, Ulster Bank had written letters to all farming customers inviting them to engage by 31 May, two months later than the bank’s initial deadline.

“The IFA expects Ulster Bank to be flexible with the 31 May time frame and to work constructively with farming customers who are actively seeking a workable solution that would allow them to remain with Ulster Bank if they wish,” said IFA president Joe Healy.

IFA farm business chair Martin Stapleton is encouraging Ulster Bank farming customers who are concerned about the loan sale to make contact with their relationship manager.

“At no time should farm loans be sold by a bank where there is a genuine borrower actively engaging to identify a viable repayment plan,” he said.

Bad news

The Irish Cattle and Sheep Association (ICSA) has also expressed its concern about the loan sell-off. ICSA rural development chair Seamus Sherlock believes that banks should have a long-term view about their business with key customers, such as farmers. This is bad news, he says, for those who wished to resolve their business dealings with Ulster Bank over time.

Sherlock was keen to stress that following its recent meeting with the Financial Ombudsman, the ICSA was able to clarify that whatever rights of complaints customers have with Ulster Bank would be carried over and must be recognised by the new owner of the loan.

“This is not ideal, but may go some way to reassure agricultural borrowers in distress,” he said. “Many of the loans that are included in the sale will belong to private individuals trying to hold on to their family home or farm. The ICSA believes that anybody who is keen to find a resolution to their financial difficulties be given every opportunity to negotiate a realistic outcome over the long term. We would also have concerns that this move by Ulster Bank will set a precedent and be replicated by the major Irish banks.”

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EXCLUSIVE: Ulster Bank to sell €100m of farm loans