Bank of Scotland targets farm loans

Bank of Scotland is fighting to win back their share of lending to farmers which has slipped in the turmoil of the past two years. A new farming team has been put in place under Sandy Hay and has been integrated with the agricultural division of parent company, Lloyds Banking Group, which employs 200 farming specialists throughout the UK.

"The farming industry is facing challenging times but Bank of Scotland is geared up to support farmers with profitable businesses," Hay told journalists at a briefing in Edinburgh.

"Volatility will be the order of the day but there is a good slug of optimism in there as well."

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The bank has produced two advisory booklets on livestock and cereals to help farmers and Hay also sees considerable opportunities in the renewable energy sector.

"We have funding available for the right projects," he said.

Looking further ahead, Hay said planned reforms of the European Union's Common Agricultural Policy (CAP) would inevitably result in winners and losers.

This would results from the move away from the current system of calculating single farm payment (SFP) on a historic basis to an area based system

"The CAP underpins farm profitability and that will continue under the new regime due to come in from 2013 onwards," he said. "The recent Pack Report has put Scotland ahead of the game in the development of future policy but a lot of water has to pass under the bridge before final decisions are made by the European Council of Farm Ministers and the European Parliament in 2012."

Agriculture director Gareth Oakley said Lloyds, including Bank of Scotland, had picked up more than 1,000 new farming customers over the past year, although he admitted most were in England and Wales.

"We want to replicate our success in winning new customers south of the Border in Scotland," said Oakley.

The bank claims its agricultural business has been expanding at 15 per cent per year over the past seven years and is on target to hit 16 per cent this year. Total lending to farmers and associated industries by the bank is 2.1 billion which, with 2.3bn lent by sister company, Agricultural Mortgage Corporation (AMC), represents a significant share of the 11.85bn lent to farmers by all banks in the UK.

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The bank has appointed Gloucester farmer and television personality Adam Henson, presenter of BBC's Countryfile programme, as an ambassador for the company to spearhead the promotional campaign for new business.