Ulster Bank Grows Farm Lending

Farmers and food processors are set to benefit from a large share of an important new £300m 'lending pot' for Northern Ireland.

Ulster Bank's Head of Business Banking, Henry Elvin, said that agri-food is one of the sectors the bank is most strongly targeting with money available through its fund for small to medium sized enterprises.

Mr Elvin was speaking at a special briefing on the agricultural industry at Ulster Bank's Belfast headquarters.

He said that while the bank's engagement with the Stormont First Minister's 'Action Group' on banking within NI continued, the extra cash for loans had not resulted from these meetings.

Rather, he explained, it flowed from resources being allocated by the parent busines, RBS, which was based on previous excellent performance at the Ulster.

Henry Elvin pointed out that Ulster Bank, which is the principal sponsor of the Balmoral Show, had lent in excess of the £250m it had committed to Northern Ireland SMEs in 2009 and that a significant amount of this lending had been to agriculture.

But he said that the bank is determined to further increasing its lending to the SME sector as a whole and to agriculture in particular.

"We have a very strong focus on farming and we are pleased with the increase in our lending to the sector in the past year in particular.

"We see it as one of the sectors where there will be strongest demand in 2010 and we anticipate that a significant proportion of our new £300m SME fund will go towards supporting farmers as well as food processors," Mr Elvin said.

Meanwhile, Cormac McKervey, the Head of Agriculture at Ulster Bank, is also broadly positive about the prospects for the industry.

"After a very difficult 2009, milk returns are much improved due to lower supplies locally and internationally and by the competitive advantage earned through Sterling's devaluation.

"The improved prices will help reduce the pressure felt on many dairy farmer accounts through last year," he said.

The bank's Chief Economist, Richard Ramsey, also pointed out that agriculture is a vitally important sector for the Northern Ireland economy.

"Even though 2007 was characterised by a booming property industry, it was the agri sector that recorded the strongest annual rate of growth at 20% in real terms.

"And whilst Northern Ireland's private sector output as a whole has been declining, agriculture, alongside the wider agri-food sector, have been amongst the few sectors to record positive growth," he said.

"There are challenges ahead for agriculture, but as a sector, its importance to the Northern Ireland economy, as other sectors suffer, will only grow," Mr Ramsey concluded.

(BMcC/GK)