Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


BNZ grabs more agribusiness lending, upbeat on rural sector

BNZ grabs more agribusiness lending, upbeat on rural sector

By Paul McBeth

May 8 (BusinessDesk) - Bank of New Zealand, the local unit of National Australia Bank, continued to grab more market share of agribusiness lending and is upbeat on the prospects for the rural sector.

The lender made a concerted effort to build its capability in rural lending three years ago and continued to lift market share of agri lending in the six months ended March 31, with 22.2 percent of the market, up from 21.7 percent a year earlier, and 19.2 percent in 2010.

Chief executive Andrew Thorburn, who will become chief executive at the NAB group later this year, told BusinessDesk agribusiness is “an important focus for us” after the lender’s decision to boost capability three years ago, with asset quality “improving significantly.”

Growth in business lending and lower impairment charges on distressed loans underpinned a 3.4 percent increase in BNZ’s first-half cash earnings to $400 million.

Incoming CEO Anthony Healy, who’s currently head of business banking, said Canterbury has driven the lender’s growth in agribusiness, which is partly on the strength of the dairy sector. Forestry was very strong, with BNZ the biggest lender to the sector, and benefiting from Chinese demand for logs, and viticulture has been recovering from a “tough five or six years.”

While the bank has seen credit growth in the sector, some farmers have been using high dairy prices to strengthen their balance sheets by “paying down debt,” Healy said.

In November, the Reserve Bank said high levels of agriculture debt, heavily concentrated in the dairy sector, were a threat to the financial system’s stability, and vulnerable to a drop in commodity prices and a rise in interest rates, both of which have happened since then. The bank will release its six-monthly financial stability report next week.

BNZ lost market share in mortgage lending, with 15.8 percent as at March 31 from 16.2 percent a year earlier. Thorburn said the six-month period was unusual in that it included the introduction of the Reserve Bank’s restrictions on low-equity lending, and the start of a higher interest rate cycle.

The bank has the lowest share of high loan-to-value ratio mortgage books, with 13.8 percent of home loans at 80 percent or more.

BNZ increased gross loans 5.2 percent to $62.5 billion as at March 31 from a year earlier. The bank had customer deposits of $41.7 billion as at March 31 from $37.1 billion a year earlier, claiming 19 percent of market share for retail deposits.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news