Meanwhile, it expects the Australian agricultural sector to fare better than the dairy downturn-affected New Zealand economy in the current year.
RaboBank Australia & New Zealand on Monday booked a net profit of $277.8 million for the 2015 calendar year, an increase of 5.8 per cent over the previous year.
The subsidiary, which is one of Australiasia’s largest rural lenders, saw revenues increase 3.4 per cent to $750m over the period, while costs were held largely steady. “And this was despite increasing local and global regulatory and compliance requirements,” managing director Thos Gieskes said.
In welcome news for the drought-stricken and commodity-crunch plagued dairy industry, Rabobank said bad debts fell 10 per cent during the year. The impairment charges stood in contrast to Westpac’s results, also released on Monday, which showed impairments jumped a steep 96 per cent from a year earlier.
However, stiff competition for retail deposits saw Rabobank’s local deposits fall 2.6 per cent over year. But the bank still holds more than $15 billion worth of deposits on its books.
Rabobank’s global operations saw a net profit of €2.2 billion for 2015, representing a 22 per cent lift.
Mr Gieskes said while the bank was optimistic on Australian agribusiness over the coming year, where the environment was “conducive” for expanded investment intentions in the sector, the New Zealand market was more concerning, having been impacted by the global dairy market downturn.
“While it will undoubtedly be a difficult year for the New Zealand agricultural sector, and specifically those involved in dairy there, we do expect to see continuing business growth there,” he said.
Australia’s big four banks, which dominate lending across the ditch, are facing pressure from non-performing agricultural loans in their New Zealand operations.
Source: The Australian
