Rabobank provisions fall sharply

The lender is upbeat on Australian agribusiness after notching up a solid full-year profit.

Rabobank was optimistic on Australian agribusiness over the coming year. Picture: Zoe Phillips.

The local arm of global agribusiness lender Rabobank saw a hefty fall in bad debt provisions over 2015, while notching up a solid lift in profit.

And it expects the Australian agriculture sector to fare better than the dairy downturn-affected New Zealand economy in the current year.

Rabobank Australia & New Zealand yesterday 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 Australasia’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 ailing dairy industry, Rabobank said bad debts fell 10 per cent during the year. The impairment charges stood in contrast to Westpac’s results yesterday, which showed impairments jumped 96 per cent from a year earlier.

However, stiff competition for retail deposits saw Rabo­bank’s local deposits fall 2.6 per cent over the year. But the bank still holds more than $15 billion of deposits on its books.

Rabobank’s global operations saw a net profit of €2.2bn ($3.3bn) 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.