Farm Ireland

Tuesday 20 March 2018

ACC Bank retains loan deals of 2,900 farmers despite closures

Caitriona Murphy

Caitriona Murphy

More than €310m in loans to 2,900 farmers will be retained by ACC Bank, despite its decision to close all of its Irish branches and business centres.

The bank has loan agreements in place with 2,900 farmers, with terms extending up to 15 years.

It also has 1,500 farmers among its 5,000 deposit account customers who have €110m saved. The move has been described as a blow to competition in the sector by farm organisations.

ACC confirmed to the Farming Independent that it would continue to hold its loans to the agriculture sector.

"The bank will continue to support its farming customers. There are no plans to transfer those loans to another bank or change terms. Any outsourcing will not include agricultural loans," said a spokesperson for the bank.

The bank intends to withdraw from providing standard banking products, such as deposit accounts and current accounts, and intends to focus solely on debt recovery.

"During 2014, the bank will close all its business centres to the public and intends to give up its banking licence.


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"It will, however, continue to support its customers in the agriculture sector, given its strong heritage in this area, and consistent with Rabobank's international strategy for food and agri," the spokesperson continued.

"While ACC Bank will be returning its banking licence, under the alternative authorisation it will seek from the Central Bank, the bank will still be in a position to continue to lend to this sector.

"Rabobank, which has a strong relationship with the agricultural sector, continues to operate business as usual, as does RaboDirect."

She said although ACC was exploring the possibility of outsourcing a small portion of its loan book, this would not include agricultural loans.

Farmer customers of the bank will be contacted by the bank in the near future to advise them on how the bank changes will affect them.

However, loan payments should continue to be made as they fall due.

Both the IFA and ICSA described the bank restructuring as a worrying development for the agricultural industry.

IFA business chairman Tom Doyle urged the Government to ensure the remaining banks did not exploit this opportunity by increasing the cost of loans and banking facilities.

ICSA president Gabriel Gilmartin said less competition was bad news for farmers and other businesses.

"We are already seeing the impact on business of less competition where loans are harder to get and fees and interest margins are creeping up.

"This is bad news for farmers and business, especially progressive enterprises that are expanding and increasing exports," he added.

"The Government needs to urgently examine what can be done to ensure sufficient competition in banking and how to expand credit to export-oriented businesses such as farming."

Irish Independent