By Gareth Vaughan
Specialist rural lender Rabobank New Zealand posted an 18% rise in March quarter profit after a big drop in impairment losses on loans.
Rabobank's General Disclosure Statement for the three months to March 31 shows the bank's unaudited net profit up NZ$3.489 million, or 18%, to NZ$23.150 million from NZ$19.661 million in the same period of last year.
The rise came after a big drop in impairment losses, which fell by more than NZ$5.6 million to just NZ$663,000 from NZ$6.3 million. This more than offset 5% and 4% falls in net interest income and total operating income, respectively, and an 8% rise in operating expenses.
Quarterly expenses rose NZ$1.8 million to NZ$24.8 million, and operating income dropped NZ$2.2 million to NZ$54.4 million. Net interest income fell NZ$2.7 million to NZ$53.5 million.
Meanwhile, Rabobank grew gross lending by NZ$61.7 million, or less than 0.80%, in the March quarter to almost NZ$8.2 billion. Rabobank's growth was slower than the overall market growth in rural lending. Reserve Bank sector credit data for the quarter shows rural lending rose NZ$579 million, or about 1.2%.
The bank's individually impaired assets increased by NZ$2.9 million to NZ$320.8 million, but its assets at least 90 days past due but not impaired fell NZ$953,000 to NZ$51.5 million.
Deposits, including through online banking unit RaboDirect, grew NZ$65.9 million, or 2%, to nearly NZ$3.4 billion.
Rabobank's total assets increased by about NZ$27 million to NZ$9.116 billion, and its total liabilities rose about NZ$5 million to NZ$8.210 billion. Total equity was up about NZ$21 million to NZ$905.375 million.
Rabobank's tier one capital ratio (which represents shareholders' funds in the bank), expressed as a percentage of total risk weighted exposures, fell to 9.19% at March 31 from 9.62% at December 31. Its total capital ratio dropped to 12.41% from 12.95%. The Reserve Bank mandated minimums are 6% and 8%, respectively.
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