Mayor says banks are greedy

Banks are being accused of profiteering from cash-strapped farmers stricken by the drought reports the Waikato Times. But one rural banker says people need to talk to them first about their problems. Hauraki Mayor John Tregidga, whose district has had no significant rain since January, said he knew of three or four farms that were under threat because of the drought.

Mr Tregidga said BNZ had told one unnamed couple, whose farm had lost $80,000 last year and had been hit by the drought, to prepare to sell in December. “The bank is willing to continue the finance while they receive a rate of 9.2 per cent,” Mr Tregidga said, reading from a statement supplied by the couple’s accountant. “Current floating BNZ rates were at around 5.35 per cent with capped fixed rates for two years at 7.545 per cent. These levels of interest would save between $80,850 and $34,650 in annual interest at these prevailing rates, enough to at least make it a viable farm in this last season, even with the drought.”

Mr Tregidga said the couple were prepared to work hard for an extra year or two, knowing they would not earn anything for themselves, but the bank had said it was not an option. “The bank has taken a high and crippling interest for three years and then is going to leave these young farmers with a loss of all of their equity saved over 10 years plus in sharemilking.” BNZ did not respond to a request for comment.

Environment Waikato’s Regional Drought Committee was last week snubbed by ANZ, BNZ, Rabobank and Westpac which failed to send any representatives to the meeting. Stuart Ewing, northern regional manager of rural banking for National Bank, who was the only banker to attend, said Mr Tregidga’s example was one-sided. “There will be a couple of sides to it,” he said. “All the banks would welcome people coming to them.” Neil Bateup, chairman of the Rural Support Trust, said the banks needed to cut farmers some slack.