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

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news