Mr. Sean Farrell:

Agriculture continues to be the largest stand-alone business sector in Bank of Ireland. We are committed to meeting our customers' needs across all enterprises. When we look across the range of lending we provide for the sector, we see that most of the demand for on-farm development funding comes from the dairy sector, with pig and poultry farmers also investing in improved housing facilities as they seek to increase efficiency and output levels. The beef, tillage and sheep sectors also continue to have annual working capital requirements to fund stock and input purchases. With our customers, we are aware of the potential implications of a hard Brexit and the importance of Common Agricultural Policy, CAP, payments to support farm incomes. In that context, we welcome funding applications for farm developments focused on improving efficiencies. Lending for land purchase spans all enterprises. We saw a 25% increase in land loan approvals last year. Bank of Ireland also participated in the Strategic Banking Corporation of Ireland, SBCI, agriculture cashflow support loan scheme in 2017. We successfully loaned €65 million to our customers in partnership with the SBCI. Farmers are not eligible to apply under the new SBCI scheme aimed at supporting SMEs exposed to Brexit. However, should another farmer-focused scheme come onto the agenda in 2018, we will look to offer support and participate, as we have done in previous SBCI and Government-sponsored lending initiatives.

Driven by increased profitability and improved cashflow last year, average agri-overdraft balances at the start of the year were 26% lower than 12 months previously. Despite the additional fodder and feed purchased on farms in recent months, current overdraft utilisation levels are lower than they were a year ago. In recent weeks we have seen a small increase in the number of requests from customers seeking temporary overdraft limit increases and stocking loan extensions owing to increased feed costs. We are taking a proactive approach to supporting customers. All of our front-line staff are acutely aware of the challenges they are facing and we are actively asking customers, if they believe they are likely to need extra working capital or other support, to let us know and that we will look to put the required facilities in place for them. Our approach, where we believe a customer has a viable farm business, is that we need to support him or her through short-term cashflow challenges. Options available to support customers with cashflow challenges include increases in overdraft facilities and the provision of new or the extension of existing stocking loans. Additionally, through our AgriFlex loan proposition we can offer customers interest only repayments to reduce their annual debt funding requirements. We understand many customers invested significantly in new farm buildings and land improvements, funded through cashflow during 2017 which, in hindsight, might have been funded more appropriately through a farm development loan. Customers can apply to retrospectively fund these developments with some borrowings now and apply the loan proceeds to supporting their cashflow in the current year. Bank of Ireland views lending to the agri-sector through that lens of volatility, accounting for peaks and troughs in commodity prices and farm input costs, and their subsequent impact on farm incomes. We understand weather conditions, disease and other factors can also have a serious impact on cashflow. We are willing to provide support through these troughs where a farm business is viable in the long run.

Lending is one of the ways we look to support customers. We place significant value on the sector-specific expertise that we bring to clients and as the agri-sector head I work with a team of agri-development managers who provide specialist support to customers and to colleagues and to implement an agri-training and capability development programme across the bank's branch network. We offer customers online business and cashflow business tools throughthinkbusiness.ie, a website developed by Bank of Ireland to support farmers in all businesses, and customers can now also apply online to Bank of Ireland for loans for up to €120,000.

We are committed to hosting sector-specific events aimed at providing relevant information and networking opportunities to customers. So far this year, we have held over 40 such events, targeted specifically at the agri-sector. These events included farm development case studies forums, digital skills development workshops, agri-business breakfasts and sector update seminars.

I thank the Vice Chairman for the opportunity to address the committee today and would like to conclude by reiterating Bank of Ireland's commitment to supporting our customers. We understand the challenges brought about by the fodder crisis and it will take some time for its full impact to be known and to feed through the system. We will continue to assess how best we can channel specific supports to the sector in line with market demand. I will gladly answer any questions the committee may have.