By Gareth Vaughan
A big drop in the value of impairment losses on loans has seen rural lender Rabobank record a healthy June quarter profit in contrast to a loss in the same period of the previous year.
Rabobank also grew lending by about NZ$225 million to NZ$7.3 billion in the June quarter, during which Reserve Bank sector credit data shows agriculture sector debt rose by just NZ$50 million to NZ$47.251 billion. This suggests Rabobank is continuing to lend more money to the rural sector than larger rivals such as ANZ, the country's biggest rural lender, which saw its overall gross loans contract by NZ$756 million in the June quarter. Auditing firm KPMG estimated in its annual Financial Institutions Performance Review survey that Rabobank accounted for 65% of the country's new rural lending last year.
Figures in Rabobank's General Disclosure Statement for the six months to June also show the bank recorded an unaudited NZ$11.7 million profit after tax for the three months to June, a NZ$15.4 million turnaround from a NZ$3.7 million loss in the same period of last year. The turnaround comes after Rabobank's impairment losses tumbled to NZ$8.9 million in the June quarter this year from NZ$34.5 million in the same period of last year.
The bank's net interest income rose NZ$900,000 to NZ$48.2 million and total net operating income NZ$1.2 million to NZ$49.5 million. Meanwhile, operating expenses climbed NZ$5.1 million to NZ$24.2 million.
Rabobank, which has the highest possible AAA credit rating from Standard & Poor's and whose ultimate parent is a Dutch co-operatively owned bank, lifted total assets NZ$49 million to NZ$7.36 billion. Deposits, including those with RaboDirect, rose NZ$151 million to NZ$3.375 billion.
Both impaired assets and assets at least 90 days past due fell. Impaired assets fell NZ$12.1 million from March 31 to NZ$387.4 million and 90 day past due assets dropped NZ$16.8 million to NZ$39.7 million.
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