Ulster Bank Slammed for profiteering on AG. Cash flow scheme.


Rural development chairman, Seamus Sherlock, has hit out at Ulster Bank for their profit making on Ag. Cash Flow support schemes.

Ulster Bank Slammed for profiteering on AG. Cash flow scheme.

  • ADDED
  • 3 years ago

Rural development chairman, Seamus Sherlock, has hit out at Ulster Bank for their profit making on Ag. Cash Flow support schemes.

The statement from the chairman comes after the news of the bank making profits off the Agricultural Cash Flow Support schemes in place for farmers. He said he was flabbergasted to learn of

the 1% set up fee the bank are charging farmers who are availing of a special 2.95% interest rate.

He said “This scheme is providing €150 million in low interest loans to farmers sourced from the Strategic Banking Corporation of Ireland. Critically, the Government has leveraged some €11

million of EU exceptional adjustment aid with exchequer funds of €14 million, which provides an interest subsidy of €25 million. “

He added that these funds were allocated especially to farmers saying, “The EU funds were specifically allocated to benefit farmers in the light of the commodity price crash in 2016 and the

exchequer top-up was meant to amplify this support. “

Mr. Sherlock also spoke of the reasons why Minister Creed put this money as a subsidy for low interest loans in the first place “The strategic decision taken by Minister Creed to put this money

in as a subsidy for low interest loans was a very deliberate effort to get the maximum benefit to farmers who are struggling with cash flow and merchant credit issues. The spirit of this was that

the 2.95% interest rate coupled with the interest subsidy means that banks should have adequate margin without resorting to additional creaming off of money from farmers.”

He reiterated his disappointment at the news, adding that if other banks were to follow suit it would have meant almost €1.5 million of farmer’s money being pocketed by the banks. He said

“ICSA welcomes the fact that Bank of Ireland and AIB are happy to operate the scheme without recourse to additional charges but we are very disappointed with Ulster Bank on this. If all

banks had taken this approach, it would have amounted to some €1.5 million taken as extra profit out of farmers’ pockets when the total actual support is €25 million. As it stands, the fact is

that this will cost Ulster Bank customers some €300,000 extra which is coming from farmers who by definition are under pressure on the cash flow front.”

He concluded by saying “It is important to note that the huge demand and very tight timeframe for this scheme meant that, realistically, farmers had no potential to shop around and therefore

were a sitting duck for this egregious charge.”

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