IFA appeals to Ulster Bank not to engage with vulture funds
ULSTER BANK must make a commitment not to sell its loan book to a vulture fund, the IFA has warned.
With an estimated 10,000 farmers with borrowings from Ulster Bank, and a further 10,000 availing of current account facilities, IFA president Tim Cullinan is calling on Government to take action.
The move follows developments that Ulster Bank’s UK parent, NatWest, is actively considering winding down the bank as the impact of Covid-19 has served to further exacerbate Ulster Bank’s bottom line.
‘Ulster Bank must make a commitment that it will not to sell its loan book to a vulture fund that would leave these farmers completely high and dry.
‘The Government must intervene and prevent this from happening,’ said Mr Cullinan adding that a decision on the outcome of the strategic review and Ulster Bank’s future in the Republic of Ireland is expected imminently.
Meanwhile, IFA Farm Business chairperson Rose Mary McDonagh said that in the event that Ulster Bank decide to exit Ireland, it must first facilitate existing customers to move to another full-service lender.
‘Ulster Bank must support its customers in moving to one of the other pillar banks in the state,’ said Ms McDonagh.
‘Borrowers making repayments to a vulture fund have difficulties accessing new finance elsewhere because the fund will not release the security they hold. IFA has repeatedly highlighted that it’s neither appropriate, nor suitable, to transfer loans to vulture funds,’ added Ms McDonagh.
Figures from the Central Bank for December show that Ireland has the second most expensive mortgage rates in the euro area, second only to Greece, with the average rate on new mortgages of 2.75pc.
‘Ulster Bank’s departure would be another crippling blow to competition in the sector. Questions have to be asked of all stakeholders in the banking industry as to why the trend in reduced competition is allowed to continue unabated,’ she concluded.