Mr. Michael Lauhoff:

Rate is always very topical in respect of the overall cost of credit and how we deploy it. Competition is part of it but we do have to cover our core costs and there is a return on the capital we deploy too. Overdraft is the most expensive form of funding for several reasons, even if the lines are not used we have to allocate capital against it and that has to be funded, so that feeds into some of it. Overdraft is not necessarily the right solution for the pressures at the moment. If a more enduring cash flow or cash cost is incurred that needs to be funded over several years, a term loan should be in put in place. In some cases it is more short term where a stocking loan that will be paid within the 12-month period is most appropriate. Our default position is not to look for overdraft. We focused on overdraft usage in the presentation because that is normally the first place that we would see signs of cash flow pressure. Each situation differs from another but the level of cash resources is higher now than it would have been at this time last year. There are several farmers who have significant cash flow challenges that have been increased as a result of the fodder crisis but we do not see that in some other areas where cash resources have not been spent. The experience differs according to the part of the country and the sector.

In respect of the different interest rates in Ireland and the rest of Europe, another key feature is that the scale of the downturn in the Irish market, relative to much of Europe, has been far more severe in the banking sector here with the consequence that we have higher capital requirements and have to allocate more capital against lending than many of our European peers.

That is a feature in the market that we have to deal with. Ensuring that we can provide pricing at as competitive a rate as possible and getting a return on the capital we allocate are matters on which we must focus.

The branch model changes were mentioned. I accept Deputy Penrose's point that the number of staff in the branches has changed significantly. To ensure that we can maintain a presence in the market and provide a service, we have had to change how we provide that service. Our focus is to make sure that we have staff available out in the marketplace to meet farmers or business and to be able to discuss their requirements at their place of business where at all possible, and then changing the branch structure too to make sure that it can provide a service.

In terms of our customers' requirements, specifically, in the agri-area when it comes to seasonal-type facilities, being able to apply for and get credit by phone is a significant benefit to them. It does not take time out of their day. Historically, where they would have had to come in to the branch to go through their requirements, we now have all the details of their previous history because of the relationship and it enables us to provide that facility through a phone call with no need for form-filling and other issues as happened in the past. How we provide that service will evolve. It is a matter of making sure that we can provide a service as best as possible.

Likewise, we have invested in our ATM network in order that farmers can lodge a cheque or anything whenever they want. We have external lodgment ATMs. They do not have to come off the farm during the day to do these tasks whereas, historically, they would have had to.

I accept that there are changes. Some of those changes will take time to evolve but our focus is to make sure we can provide the service through investing in technology and support in that area but also in trying to make sure that we can provide the service for more complex needs on a one-to-one basis.