Agribusiness banking specialist Rabobank continued to build its rural lending portfolio in the year to December 31, 2024, reporting net lending growth of $543 million for its New Zealand Banking Group.
Rabobank New Zealand CEO Todd Charteris said the bank’s strong portfolio growth during 2024 was further proof of its commitment to New Zealand’s food and agribusiness sector.
“Our share of the agricultural lending market continued to grow in 2024, rising to 22 per cent, and we are now the second largest lender to New Zealand’s agricultural sector,” he said.
“New Zealand’s food and agri sector emerged from 2024 in a much better place than it started, off the back of improvements in agri commodity pricing and downward movement in interest rates. The outlook for the sector appears bright, and our intention is to continue expanding our business by supporting our existing clients and by exploring opportunities with other leading agricultural operators.”
Mr Charteris said the bank’s food and agri lending book grew to $17.15 billion in 2024, up by around 3.3 per cent on the prior year.
Todd Charteris, CEO, Rabobank New Zealand
“Our agricultural lending portfolio (inside the farm gate) increased by $545 million to $13.75 billion last year, with this significant lift recorded despite the overall agri debt market growing by just $112 million over the same period,” he said.
“The bank’s corporate post-farm gate portfolio was relatively unchanged from 2023 (down by $2m to $3.40 billion) and overall, this resulted in total net lending growth of $543 million to the New Zealand food & agri sector.”
While healthy, Mr Charteris said the bank’s 2024 net profit after tax NPAT of $195.30 million was back by $23.16 million (10.6%) on the prior year due to a combination of tepid income growth, higher operating expenses and higher impairment charges.
“Despite strong growth in our lending portfolio, our income was largely unchanged as a result of strong pricing competition across the agri lending market and higher funding costs which resulted in a fall in our net interest margin,” he said.
“Operating expenses rose by 6% to $216.42 million, with this partly attributable to continued investment in our processes and systems.
“Increased impairment charges also played a role in the lower NPAT, with these rising to $46.95 million from $18.31 million the prior year.”
As with previous years, Mr Charteris said, all of Rabobank New Zealand’s profits have been retained in New Zealand and are used to help fund food and agribusiness operators.
“This is a fundamental part of our strategy as it allows for plenty of room for continued growth,” he said.
Mr Charteris said the bank’s deposit portfolio recorded another year of strong growth lifting by 13.2 per cent to $7.44 billion.
“Awareness of Rabobank’s Online Savings and deposit offering continues to grow which has helped drive additional deposit growth and further lifted the percentage of overall bank funding sourced from local deposits,” he said.
One of the highlights for the bank in 2024, Mr Charteris said, was the launch of a new advertising campaign featuring the work Rabobank is doing to help grow and strengthen rural communities across New Zealand.
“The campaign launched in August and featured a new television commercial introducing the Rabo Community Fund and showcasing four of the major initiatives it supports: Garden to Table, Growing Future Farmers, Meat the Need and Surfing For Farmers,” he said.
“The Community Fund was set up here in New Zealand in late 2021 and is funded by an annual contribution from Rabobank New Zealand. We’re really proud of the contribution the fund has made to rural communities over recent years with over $3 million of funding having been made available for initiatives across New Zealand by the end of 2024.”