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National Australia Bank has increased its leading market share position in the farm-based agribusiness sector
According to data from TNS, a leading provider of global market information, the National's market share in the agribusiness sector, which is the share of all lending and deposits*, rose from 23% to just over 26% over the twelve months to the end of May 2004, strengthening the National's leading position.
The National's General Manager Agribusiness Mike Carroll attributes the success to the bank's long-term focus on the agricultural sector and its investment in a team of over 530 agribusiness specialist bankers.
"Our Agribusiness banking relationship managers are regionally located and empowered to make decisions on credit and pricing," Mr Carroll said.
Mr Carroll said the National is also on track to increase its lending to Agribusiness clients by over one billon dollars for the bank financial year, to the end of September. This loan growth in 2003/04 will set a record for the National's Agribusiness division, which was established just under 4 years ago.
Mr Carroll says this increase in lending volumes has predominantly come from larger customers, reflecting the industry trend towards farm consolidation.
"Our strongest growth has been with customers who borrow more than two million dollars and we have seen virtually no change in lending to customers borrowing less than $100,000.
"While the National's loan growth has predominantly come from customers expanding their businesses, we've also seen strong growth in lending to primary producers who are refinancing to the National from other lenders.
"This demonstrates the success of our relationship banking model. Every primary producer customer has a dedicated, specialist agribusiness banker who can provide financial services on a personalised basis.
"While we have been through one of the worst droughts in Australia's history, and in some areas its effects persist, the proportion of agribusiness loans which customers are having difficulty servicing is at a 10 year low. This is evidence of responsible lending practices over the last decade and particularly over the last four years since the National created a specialist agribusiness division.
"We are striking the right balance of on one hand supporting large and highly productive operators who can afford higher gearing levels, and on the other ensuring that less profitable farmers don't take their debt to levels that might threaten their viability."
The TNS research also shows that the National provides banking services to one in three Australian farmers. The TNS data covers farm-based agribusinesses and is based on a survey comprising over 2000 telephone interviews per year.
The National's Agribusiness division employs over 530 specialists based in over 100 locations in rural and regional Australia.
* Includes personal lending for business purposes, trade finance, leasing, short-term/long-term deposits, short-term/long term lending.
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