AGRIBUSINESS is suddenly a seriously big business for trans-Tasman giant, ANZ, after it shot up the ladder to become the second largest player in Australia's rural market in March.
Australian and New Zealand Banking Group's (ANZ) purchase of the former financial services division of pastoral house, Landmark, boosted its share of the regional banking market to about 18 per cent - up from about 14pc last year.
The deal included a $2.4 billion loan book and deposits worth about $300 million.
But according to ANZ's Mark Hand, without doubt the best part of the Landmark aquisition was picking up 170 rural finance specialists who previously worked with the big farm services company.
"These people have lived and breathed agribusiness as part of their work with Landmark," said Mr Hand who heads up ANZ's agricultural and regional business division as general manager of regional commercial banking.
"They've been surrounded by, and closely involved in, the business of agriculture at saleyards, in the fertiliser market, rural property and much more - they're a real prize for our expanding business."
For the 10,000 former Landmark customers, whose ties with that company's financial services division connected them to handy lines of credit for livestock and merchandise purchases, the ANZ takeover is likely to offer more of the same, plus links to extra banking advice and information that wasn't previously available.
ANZ's position as one of Australia's "big four" AA rated lenders (and one of only nine AA rated banks in the world) has also improved the competitiveness of finance options likely to be available to customers.
"Obviously we've got a much broader loan and deposit product range than Landmark could offer, but the advantages to customers go much further because of the depth of research and analytical back up we can offer," Mr Hand said.
"It's a case of being able to contribute a lot more to the way our customers run their farms."
Apart from moving them to a desk at a nearby ANZ branch, the new personnel on the bank's payroll would still be mostly found working alongside stock and station agency or merchandise staff at the local Landmark store, or on-farm with farmers.
The Landmark acquisition has coincided with ANZ diversifying its operations into Asia after paying close to $1 billion to buy 54 branches from the Royal Bank of Scotland late last year.
Both initiatives represented great opportunities to expand services to existing rural clients and grow the bank's agribusiness credentials even further according to Mr Hand.
With branches (and customers) in Taiwan, Indonesia, Singapore, Hong Kong, Vietnam and the Philippines he said the foothold in Asia was more than just a bonus for the bank's balance sheet, but a chance to connect with new markets that were keen to do business with Australia's food sector.
"Agricultural trade opportunities are growing significantly in Asia and I can see us capitalising on our strength in the Australian and NZ market to develop more partnerships with Asia," he said.
And the ANZ's position in the combined Australian-NZ marketplace is strong - it's total portfolio makes it the biggest Australasian agribusiness lender, ahead of its local rival, the National Australia Bank.
It's agribusiness credentials also recently won it the Australian banking industry's Canstar Cannex Best Value Agribusiness Award for the second year running.
ANZ got the top vote based on its suite of purpose-designed agri products and its solid range of business banking services also strongly rated for customer access to its agribusiness managers.
"We've always been a solid agri-based bank. Our customers know we do it well, but our profile probably hasn't been as well known outside that customer base," Mr Hand said.
"It's in our interest to see our farmers do well - we are not into banking them for the short term and hoping it will work out.
"You don't get get to be number two in the game by suddenly showing an interest in agribusiness - this is something we're in for the long haul.
"Now we've moved up to second place we also have the size and scale that can handle more growth opportunities for the bank and our customers."
One of the 170 financial services staff to switch from Landmark to the Australian and New Zealand Banking Group (ANZ) a few months ago, Matthew Wakely's experience is typical of the skills keenly embraced by his new employer as ANZ beefs up its agribusiness profile.
In the 1990s Mr Wakely started his finance career working with another bank for 10 years across a wide area of NSW from Walgett to Wilcannia and Griffith, then joined Landmark in Dubbo.
"The Landmark job gave me real scope of knowledge about the agriculture sector - you get so much access to people in the know like agronomists or stockies or farmers," he said.
Being a financial specialist with the pastoral house was also "a very different culture" to the traditional banking sector, with at least 50 per cent of his time spent on farm or at farm related events talking with farmers.
Little appeared likely to changed, with his role as an ANZ agribusiness manager still closely aligned to what was happening in Landmark agencies and servicing Landmark clients.
"I thought Landmark was very good at servicing its customers, but we didn't have the product depth and were limited to agricultural investments, which often excluded us from helping somebody whose portfolio had off-farm interests," he said.
"Being part of a major bank is a good fit for us. We're still very close to Landmark but have a greater depth of services to offer, including some great risk management products that Landmark couldn't do," said Mr Wakely pictured talking with Landmark insurance sales manager at Dubbo, Stuart Webster.
According to ANZ's agribusiness head, Mark Hand, typical of the bank's expertise coming to the fore was the resources it offered farmers dealing with awkward trading situations like those prevailing in the grain market.
"Farmers need solid advisory expertise tailored to getting the best result for their particular situation," he said.
He said while poor grain prices were discouraging many to sell stored stocks or grow extra crop, their businesses also needed cashflow.
"Farming's an industry heavily loaded with risk volatility - commodity prices, exchange rates, seasonal conditions, irrigation water restrictions, and more - our job's to help farmers make cashflow decisions that let them cope with that volatility."
Email a friend