NatWest must make a commitment that it will not sell any of its loan book to a so-called vulture fund, but to banks that can offer a full service to customers, IFA president Tim Cullinan has said.
The comments came following the announcement that NatWest will wind down Ulster Bank services in Ireland following a phased withdrawal.
“This withdrawal has significant consequences for competition in the sector, but the first priority must be to ensure that the loan book ends up with a bank that provides a full banking service and not a faceless fund," Cullinan said.
“NatWest has a moral responsibility to [its] customers to ensure this does not happen. It is positive to learn of the engagement NatWest [is] having with AIB and Permanent TSB.”
It is estimated that there are 10,000 farmers with borrowings from Ulster Bank, and a further 10,000 availing of current account facilities.
IFA farm business chairperson Rose Mary McDonagh welcomed NatWest’s intention to facilitate existing customers to move to another full-service lender.
McDonagh said: “IFA has repeatedly highlighted that it’s neither appropriate, nor suitable, to transfer loans to faceless funds.
“The bank plays a critical role in agri-lending, accounting for approximately 16% of the market share in agri-customers. The bank’s exit will see the loss of 88 branches and over 100 ATMs around the country.”
Duty of care
The IFA has warned that Ulster Bank’s exit will add to diminishing competition in the sector, stating that the lack of choice for borrowers will further drive up the cost of borrowing in Ireland.
McDonagh continued: “Furthermore, Ulster Bank is an active participant in any SBCI schemes which came on the market and its departure will be a devastating loss to its customers and farmers alike.
“Ulster Bank has a duty of care to its existing customers, so it must quickly reverse the lack of engagement on the issue and reduce the stress for existing customers.”