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 Agribankers buoyed by outlook 

Agribankers buoyed by outlook

07 Jun, 2010 12:10 PM
WHILE financial markets in Europe nervously teeter on the edge of taking another economic duckdive, agricultural banking in Australia appears to be flying in another universe.

Not even the challenges of a long running drought, an often unfriendly exchange rate and creeping interest rate rises have dented a growing enthusiasm for the agribusiness market.

The past year six months have seen ANZ Banking Group significantly beef up its determination to become an even bigger force in rural banking, picking up 100,000 customers and a $2.4 billion loan book in its acquisition of Landmark's finance division.

At the same time the big Ruralco farm merchandise and services network has launched itself as an aggressive mover in the rural and regional lending market by developing a national broking service for its farm client base.

Global rural banking giant, Rabobank, has described Australia's reputation as something of a haven away from global economic turmoil.

While well aware of agriculture's seasonal difficulties here, Australia has a strong attraction for the bank, which is keen to expand its already robust rural lending profile, including opening about six more regional offices in eastern Australia this year.

"It's interesting to see an economy like Australia going red-hot," said Netherlands-based Rabobank executive board member, Berry Marttin, during a visit last month.

"Credit growth in the Netherlands, for example, has been almost zero. In Australia, you have a situation where the central bank has had to lift rates to hold the economy."

Rabo's general manager for rural Australia, Peter Knoblanche, said optimism in the farm finance sector was mirrored in results from Rabobank's recent rural confidence surveys showing rising optimism among the nation's farmers.

Analyst with banking industry ratings group, Canstar Cannex, Peter Arnold, said ANZ's Landmark purchase, and agricultural staffing strategies at other banks, showed how seriously the sector regarded agribusiness.

"The ANZ, for example, says it's serious about getting specialists on the ground to learn about the industry and become experts in agriculture not just experts in banking," Mr Arnold said.

"There's recognition that agribusiness is different to other banking and it has long term opportunities."

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