Friday, 30 March 2012 12:24

Rabobank builds rural business

Written by 

Rabobank New Zealand Ltd (RNZL) continued to build its rural banking business in 2011, recording net lending growth of $724 million, despite a contraction in the total rural debt market over the same period.

Rabobank New Zealand CEO Ben Russell said the bank's rural portfolio growth during 2011 was a positive result which primarily reflected refinance activity rather than organic growth of existing customers.

"Many farmers took the opportunity to repay debt and consolidate their financial position in 2011, with a combination of high commodity prices, a good season across much of New Zealand and low interest rates," he said.

Russell said Rabobank was "very pleased with the rural portfolio growth as it reflects the strategy and ambitions of the bank within New Zealand".

"Rabobank has pursued a strategy of sustainable growth in both rural lending and retail deposits in recent years and good progress was made on both counts," he said.

Rabobank made significant investment in its rural banking and RaboDirect businesses in 2011 with overall expense growth of 18% reflecting recruitment of new employees, re-development of critical banking systems and an upgrade of its branch network and premises.

"This had included the opening of two new branches – Wanganui and Morrinsville – and relocating to new premises in Wellington, Auckland, Whangarei and Oamaru," Russell said.

RNZL posted a net profit after tax (NPAT) of $53.8 million, down from $72 million in 2010, reflecting these increased expenses, along with tighter net interest margins and a number of one-off factors contributing to the higher 2010 year's results.

Russell said all profits earned by Rabobank New Zealand were retained and reinvested in the local market. From a risk perspective 2011 was a positive year, Russell said, with overall impaired assets remaining stable despite the strong portfolio growth, and loan provisions falling from $34.7 million to $32.7 million, including an increase in collective provisions due to the bank's exposure to the kiwifruit sector.

Rabobank New Zealand's cost to income ratio of 46.4% while higher than 2010, reflected the increased investment and remained comparable to major banks in New Zealand. Other achievements for the year included market-leading levels of customer satisfaction and significantly-increased levels of brand awareness.

More like this

Lower dollar firms outlook


Milk flow strength is a result of welcome rainfall in the middle of March, in combination with weak production comparables for last year.


Wide price range 'realistic'

Fonterra's wide forecast milk price range for the new season is realistic, says BNZ senior economist Doug Steel.

Machinery & Products

Lady muck really does suck

As anyone will attest to – if they’re married to someone with horses, have kids with ponies or are foolish…

The perfect workhorse

Hastings-based Kleer Contractors provides 24-hour machine work and labour for a local food processing plant.

» The RNG Weather Report

» Latest Print Issues Online

The Hound

No thanks!

OPINION: A mate of this old mutt's almost choked on his dog tucker when he came across the musings of…

More sunlight

OPINION: Your canine crusader hears that not all is rosy in the world of supposed rural sector congeniality.

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter