Rabobank New Zealand 2014 results
Rabobank New Zealand 2014 results
Rabobank New Zealand Limited (RNZL) has further strengthened its position in the New Zealand rural banking market, recording above market rural lending growth, and reporting its highest net profit after tax (NPAT) of $105.49 million in 2014.
RNZL recorded net lending growth of $342 million in 2014, with the bank's rural lending portfolio growing by 4.5 per cent, slightly ahead of overall rural debt market growth of 4.3 RNZL chief executive officer Ben Russell said the results were pleasing, as they demonstrated Rabobank’s ongoing commitment to New Zealand's critical food and agribusiness sector, and were consistent with the bank’s goal of supporting clients to both help feed the world and achieve their goals and aspirations.
In addition to its sound financial results, Rabobank New Zealand recorded market-leading client satisfaction in its core rural banking market, measured independently by Mr Russell said RNZL’s solid net profit results – which were $24.68 million (31 per cent) up on the 2013 NPAT – reflected a combination of stable income, low loan provisions and low growth in costs in 2014. “Some impaired loan recoveries, along with generally more favourable rural property values, assisted with some loan provision recoveries,” he “By and large, our rural banking clients across virtually all sectors, had a successful year financially in 2014. The impact of the drought and lower milk prices will affect client profitability in 2015 and 2016, however Rabobank expects a more sustained recovery in milk prices from 2016 forward. Rabobank continues to closely monitor volatile global and local market conditions across all agri sectors, via our well-respected Food and Agribusiness Research team.”
RNZL maintained a robust liquidity position, Mr Russell said, with a core funding ratio of 80 per cent, well in excess of minimum regulatory levels – from reinvestment of earnings, increases in customer deposits and long-term wholesale funding.
Rabobank continued to build its specialist online retail savings business RaboDirect during the year. RNZL added a total of $196 million in client deposits in 2014, with the majority raised through RaboDirect.
Mr Russell said all profits were retained to bolster RNZL’s already-strong capital ratio and to reinvest for further sustainable growth in the food and agribusiness market.
“This reinvestment of earnings has seen RNZL’s total capital ratio – a key measure of solvency – increase to a very strong 13.94 per cent in 2014,” he said.
“During 2014, Rabobank continued to invest to ensure it was well positioned to adapt to changing client needs. New core banking systems for both our Rural and RaboDirect businesses were commissioned, providing stability and a platform for further product opportunities for the future. Rabobank also bolstered its staff resources in the key arenas of farm succession and sustainable farming systems, to support our clients and the wider agricultural sector,” he said. “Despite these investments, operating expenses rose only 2.8 per cent for the year.”
Mr Russell said Rabobank had also established six regionally-based client councils around New Zealand, to provide a sounding board for the bank on its service offering to clients, and to assist it to invest in community initiatives. “The Client Councils are a key part of our strategy to stay close to our clients and to regularly take on board their “Overall 2014 was a very satisfying year for the bank, however we remain very focussed on continuing to evolve our business to meet and exceed client needs through what promises to be a volatile and times challenging year ahead for the rural sector.”
* TNS Business Finance Monitor, December 2014, Net Promoter Score, for agribusinesses with an annual turnover of at least $250,000 Rabobank New Zealand is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 115 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of about 8.8 million clients worldwide through a network of close to 1000 offices and branches. Rabobank New Zealand is one of the country's leading rural lenders and a significant provider of business and corporate banking and financial services to the New Zealand food and agribusiness sector. The bank has 33 branches throughout New Zealand.