Monday, April 22, 2024

Dairying repays, horticulture borrows it back

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Bank lending to the agricultural and horticultural sectors grew in the June quarter, led by Rabobank and ASB, while ANZ decreased its still market-leading position. Total lending at June 30 was $60.82 billion, up by $64 million compared with March 31.
Dairy farm businesses remain resilient and have banked significant gains in the balance sheet since the last downturn.
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Bank lending to the agricultural and horticultural sectors grew in the June quarter, led by Rabobank and ASB, while ANZ decreased its still market-leading position.

Total lending at June 30 was $60.82 billion, up by $64 million compared with March 31.

ANZ went down by $292m, Rabobank up by $220m and ASB up by $124m.

ANZ remains with the largest market share, 26.3%, followed by BNZ on 21.1%, Rabobank 18.7%, ASB 16.9%, Westpac 15.2% and Heartland 1%.

It was the first quarter of loan growth for some time because the dairy industry dominance has in recent times featured loan repayments from good milk payouts.

In the latest quarter of Reserve Bank of New Zealand reporting on agri-loans, dairy’s share fell by $199m to $38.18b, whereas horticultural borrowing increased by $218m to $5.95b.

Lending to sheep, beef, cropping and other agricultural businesses was steady at $17.5b.

Dairy loans have fallen by $1.63b over 12 months, a 4% rate of decrease.

NZAB, the NZ-wide agricultural loan broker, which analysed the Reserve Bank figures, pointed out that lending to agricultural and horticultural sectors is less than 13% of total bank lending.

That indebtedness total is now $478b, up $10b or 2.1% over the quarter, and up 6% in the past 12 months.

Some 80% of that growth was in home loan debt.

ANZ is the biggest loan bank, at $140b, followed by ASB, BNZ and Westpac all with $90-$100b each.

Banks reported that 1.48% of their agri-loans were classed as non-performing and the range across all banks varied from 0.5% for ANZ to 2.9% for Rabobank.

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