Bank of Ireland approved €665m in credit to the agri sector in 2015. Sean Farrell, head of agri with Bank of Ireland, said the bank saw strong growth in agriculture during the year, with credit approvals up 7% compared with 2014.

Two-thirds (66%) of the approvals were to the dairy and beef sectors, while 20% was related to the purchase of land. The majority of the balance (80%) was for farm development and stock loans. The bank funded the purchase of 25,000 acres of land during 2015.

He noted that Bank of Ireland is anticipating a greater usage of overdrafts in the coming months as cashflows are impacted by the lower dairy and beef prices. Some farmers are also looking at the option of moving longer-term loans to interest-only for an initial six-month period.

He said the short-term market outlook has influenced customers who were undecided as to whether they should expand and as a result may postpone some development work until prices improve. But he noted that priority work such as additional cubicles or storage capacity is not being postponed.

Approval

Overall, the bank approved an 18% year-on-year increase in new credit to small and medium businesses including farming in 2015. The bank said it received a total of almost 66,000 credit applications, up around 8% year-on-year, with 88% of applications approved.

Recently Mark Cunningham, managing director of business banking with the Bank of Ireland, said that agricultural is an important growth sector.

To read the full Agri Finance Focus Supplement click here.