23 June 1998
Bank warning on losses
FARMERS should take a hard look at their businesses – before their bank manager asks them to do it.
Jimmy McLean, head of agricultural services with the Royal Bank of Scotland, said: “In the past, increased borrowing has been used by farmers to invest in their business. But a lot of the increased overdraft in the past year will have been to cover trading losses or a drop in profits, to keep the business going.”
Mr McLean said 1998 would be another difficult year. It looked particularly difficult for Scotland where, he believes, reliance on the troubled livestock industry was responsible for Scottish farm borrowings to rise by 16% compared with an average UK rise of 6%.
But there is some respite ahead. Stephen Boyle, head of business economics at the Royal Bank, expects interest rates to fall later this year. There is also forecast to be a decline in the strength of the Pound.
- The Scotsman 23/06/98 page 28