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

 

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news