Critics slam Ulster Bank loan fee 'profit'
Handling charge not in keeping with the spirit of low-cost scheme, says ICMSA
Ulster Bank is being accused of "profiteering", as farm bodies criticise charges on its 'low-cost' loan scheme for farmers.
There has been strong demand for the €150m Strategic Banking Corporation of Ireland (SBCI) fund which offers loans at interest rates of 2.95pc, as farmers seek cash flow amid volatility in milk and grain prices.
The scheme was touted as a low-cost loan scheme. However, it has emerged that farmers who were drawing down the State and Europe-supported loans through Ulster Bank were also being charged a 1pc handling fee.
Farm bodies warned this meant farmers availing of the SCBI loans through Ulster Bank could potentially pay as much as €250,000 in total handling charges as the bank had a loan fund of €25m.
Bank of Ireland and AIB - which administered €65m and €60m of the fund loans, respectively - both confirmed they charged no handling fee. Ulster Bank previously came under fire after €125m of farmer loans were sold off to so-called vulture funds.
The ICMSA said Ulster Bank's charge was against the "spirit" of the scheme, while the ICSA accused the bank of "profiteering" on the agricultural cash-flow support loan scheme.
Documents seen by Farming Independent showed Ulster Bank charged a 1pc arrangement fee to all farmers that applied for the scheme. Ulster Bank stated the loan scheme was "fully subscribed" and, like all loans to small and medium businesses, there was an "arrangement fee of up to 1pc".