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

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news