Our Insights

Hope for the Best - and Plan for the Best

Mar 14, 2022 11:12:12 AM / by Tom Laming posted in Debt, Action, Planning, Budget, Banking, Strategy, Graduate


This is a quick note after reading the results of the latest Federated Farmers confidence survey.   

You can find it here.

I found the outcomes fascinating.

In summary:

  • There was a 10.1% decline in farmers who considered current economic conditions good
  • A net 64% of farmers believed general economic conditions would deteriorate in the next 12m – a 25% decline since the July-21 survey

These results are in an environment where milk futures for FY23 just topped $10, lamb and beef returns are strong and global wheat prices just increased 40% in a week!

Whilst it is important to recognise the impact of inflation on operating costs, the ongoing issues in the labor market and continued influence of regulatory requirements (not to mention the threat of escalating war in Eastern Europe), one could argue that from a profitability perspective we have rarely seen things so good.

Yes, history says that the usual fix for high prices is high prices, and that the higher the high the more precipitous the fall.

But what if prices don’t drop? What if this period of high commodity prices is sustained (and in fact we have been through a period over the last 3-4 years of minimal volatility and general upside)?

I think it’s an interesting thought process to go through to test what your business would do strategically (and maybe operationally) should high product prices be sustained.

That could well be nothing different – pay down debt, pay a dividend, reinvest on a as needed basis…..or could it mean that certain elements of your strategy are accelerated or reshaped?

Is this the time to bring forward infrastructure spending? Is this a great opportunity to investigate and invest in environmental management and mitigation? Could you bring forward elements of your succession process?

History says that not only do higher commodity prices lead to better profitability, they also get capitalised into land values. What would an improving balance sheet mean for your business and your decision making?

It seems to me that if we were staring down the barrel of lower product prices, we would be focusing pretty hard on business strategy in order to manage through that period.

So why not flip that and do the same sort of process, but through the lens of sustained higher price? The old saying says “hope for the best and plan for the worst”.

Let’s flip that and “plan for the best….and plan for the worst”! There will be nothing lost and everything to gain by making sure you position your business to take full advantage of the current tailwinds in profitability.

I would say the process would be great for improving your confidence levels too! 

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Bankers are from Venus, Farmers are from Mars, or is it The Other Way Around?

Mar 2, 2022 3:33:13 PM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy, Graduate



“Men Are From Mars, Women Are From Venus”, was an enormously popular book by John Gray in the 90’s which asserted the notion that men and women are as different as beings from other planets.  

Whilst it was hugely stereotypical, it suggested that male and female communication styles were vastly different and understanding the communication styles of the opposite sex would be advantageous for a better relationship.

I think that the above would resonate with most people, not due to it being the opposite sex, but instead because we’re all simply different people.

When we come from different walks of life, demographics, belief systems and DNA, communication can at times be very difficult.  

And when communication style leads to misunderstanding, this can have very significant impacts in life and in business.

And where we’re increasingly seeing this gap, is in the relationship between the banker and the borrower – which is leading to plenty of missed opportunities for both sides.

This short article teases out the rationale for this a bit further, plus sets out a few tips for how that gap might be narrowed and ensure both sides get what they want.


I cast my mind back to when I first started as a graduate Agri banker.

I was 22.

Fresh out of university and equipped with plenty of desire to prove myself to my new employer, I wasn’t short of energy or a lack of training.

Or so I thought.

The reality is that I hadn’t yet travelled the world, hadn’t raised a family, hadn’t started a business, hadn’t seen the confidence building highs of an economic cycle, nor the destroying and lingering impacts of a prolonged downturn.

I didn’t really know much about farm systems. I was still learning about the credit process.

I hadn’t felt genuine loss, nor had I seen what people could really achieve when their livelihoods were at risk or what they might do when backed into the corner.

I thought my graduate training had taught me how to listen.

But it didn’t teach me how to hear.   How to truly understand what a person was trying to say.

How to ask more courageous questions to get more detail out, how to read body language to see if I was on the right track.

How to paraphrase back what I thought I was hearing. How to give people space to think or make choices.

How to know when communication wasn’t working anymore and to stop for another day.

And despite over 20 years in this industry being in front of business owners every day of all sizes and types, and having been through a few cycles, I’m still learning.


And it’s got harder.

Bankers can be young and on average they’re getting younger with less experience as more leave the industry.   Farmers and business owners are getting older.

Being young is not a bad thing. As we get older, we may get more rigid in respect to our communication styles and be less agile to the changing style of communication.   This is not a one-way street. Older is not better than younger and vice versa.

But those same bankers are now managing more clients, more complexity and navigating more regulation meaning less time to be able to understand and develop those relationships and communication styles.

Additionally, bank relationships change more frequently so there can often be an entire reset of what you’ve been used to as a new person starts from scratch and may have an entirely different style.

Today, communication can be via a mix of email, phone and in person.   When one side is used to that, that’s fine, but the other side may not be. We’re all different in respect to how we learn or accept information most easily- reading, writing, seeing, doing.

Just as an email lacks tone and instant feedback, leading to a lack of empathy, a phone call can lack necessary detail and lead to quite different levels of interpretation.


But none of this is new and it’s not particular to the Agri sector.   So how do farmers or business owners bridge this gap?   And why should you?

Well, the “why should you” is probably obvious. Your interaction with your banker is often at a time when there is a significant capital transaction about to occur.   Or it might be a review of facilities under the cloud of a less than stellar year.

Get this wrong and that will lead to a lost opportunity.   Get it really wrong and taint can build which can accumulate, starting from poor pricing on your loans to losing serious equity.

At NZAB, we have cases every week where poor communication on both sides has led to exactly that.


So here are some tips for bridging the divide.

1. Communicate in multiple ways, multiple times

Someone wise once said to me that to effect real change, you need to communicate with your audience seven times, seven different ways.

Now I’m not advocating for that level of intensity, but if it’s important, double up on the style.  

If you’ve had a good phone call, follow up by email with the key points.   If you’re about to send a detailed email, preface it with a phone call to set the tone.


2. If its really important, don’t put something up for consideration half-baked.

We have saying in NZAB: “leave nothing to chance”.   This means that the proposal we deliver alongside the customer covers all aspects of the credit process, not just part of it.  

This doesn’t mean that you can’t have earlier positioning or informal meetings with your bank to set the scene for a later formal proposal, but make it clear that’s what these meetings are for – and that a formal request will follow. Make sure the eventual request covers all credit bases in a professional manner.


3. Check for understanding

This is obvious but done infrequently.

Paraphrase back during conversations. Paraphrasing is taking what you think the other side is saying and then saying it back to them in your language to check understanding.

After an important meeting, check back in the next day to see what the other side thought of the meeting and what they thought the key points were.   This is also a chance to see if there has been any different thinking since the meeting, particularly for those whose thinking is more reflective than impulsive.


4. Have more than one person in the conversation, particularly in person.

We all interpret the spoken word quite differently.

I’m not surprised anymore when I ask customers after a bank meeting what they took out of the meeting only to hear several interpretations of what was trying to be conveyed.

Also, when you’re in a meeting, you’re not going to spot all body language yourself.   Having a second person can create space in a meeting to observe and to reflect before re-engaging.


5. Be confident and direct, but frame up well

This goes for both bankers as much as their customers and us as their advisors.  

Too often, there is a fear of hurting the relationship by approaching difficult discussions far too delicately.

I’m not advocating for racing straight in with your messaging (or your request) like a bull in a china shop, but being too delicate can see the message not being received which can be much worse.  

Much worse for the bank might mean a loss of a customer or much worse for the farmer may mean the loss of an opportunity to grow.    

Be upfront on both sides with your needs.  


6. Don’t come into a meeting with a pre-determined position.  

This might seem at odds with the above, but its not.

Circumstances change, things develop and conversation can bring ideas forward that may not have existed before.   Staying open minded and allowing ideas to flourish is powerful when done well.

However, good framing about what “mode” you’re in is important to allow this; If one side is scared that allowing a conversation to grow into an area they can’t support, then they may not entertain the conversation in the first place.

Alternatively, acknowledging upfront that this is simply an exploratory conversation, rather than being in “execution mode” can increase contribution significantly.


7. And lastly, recognise that we’re all different and misinterpretation can happen

This is acknowledging that no matter how good we might get with our communication, we’re all going to have an off day or we’re always going to miss something.

We don’t know what happened to either side just before the meeting, or what might be playing on someone’s mind, impacting their style that day.

So, bear that in mind before we rush to judgement


You will all have your own tips here, we would love to hear them!


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Farmers’ Growing Debt Repayment Habits Are Reaping Them a Lower Cost of Banking

Feb 18, 2022 2:40:33 PM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy, Graduate



A quick graph of ours for you to look at.

Below is the percentage of all loans that are on principal and interest (P&I) in the Agri sector, plotted against the amount of Agri loans outstanding -all since 2016.

All Agri loans are generally put into three categories by the Reserve Bank of NZ;

  1. P&I Loans- these are steadily reducing on a scheduled repayment basis.
  2. Interest only loans – these are as they sound- interest is only payable during the term of the loan and the loan amount is outstanding at the end.
  3. Revolving credit type loans. These are typically overdraft or other working capital facilities, but sometimes are term debt based as well. Typically, they are interest only, although all profit proceeds generally go into these accounts in the first instance. 
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Everything in Life Goes Back to the Basics

Feb 9, 2022 11:28:47 AM / by Tom Laming posted in Debt, Action, Planning, Budget, Banking, Strategy, Graduate


I read a great story about Kobe Bryant over the Xmas break about the power of doing the basics well.

Bryant is an American basketball great famously renowned for his unequalled work ethic and competitive drive, something that lead him to 5 NBA championships, and even an Oscar when he turned his hand to directing soon before perishing in a helicopter crash early in 2020.

The story goes back to a basketball camp that Kobe ran for aspiring basketballers in the early 2000’s. One of the coaches in attendance asked if he could attend one of his individual workouts and was informed that he could, but would need to be in the gym at 4.00am! Looking to impress, the coach turned up at 3.30am, only to find the already 3x championship winner already amid a full-on session.

Other than the time of day, what really stood out to the coach was the content of Bryant’s workout. Expecting to be wowed by drills and exercises befitting a man of his abilities, the coach instead witnessed a workout focused on drills and skill work that he would have taught a 12 year old.

Inquiring of Bryant once he was done why he would work on such simple elements of the game, his reply was that without continuing to execute those basics on a consistent and high-level basis, he would not have the base he needed for anything else he may wish to attempt.

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Latest Edition: The NZAB Agri Bank Dashboard January 2022

Jan 26, 2022 10:45:41 AM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy, Graduate


Welcome to 2022 and the latest edition of our NZAB Bank Dashboard - giving you all the insights into bank movements over the quarter and the year

In this edition (for the quarter ending Sept 2021), we have also added analysis and commentary as to what's happening in business lending.   Alongside our farming base, NZAB is being increasingly engaged in the business/commercial sector to assist with strategy, capital and finance - so it makes good sense to be providing some insights in that field as well.

Bank lending continues to break records and nearly all of it in the home loan sector- but the rate of growth is starting to slow, albeit still at very high levels.  

Agri credit quality continues to improve and loans are being repaid, faster than they can be written, particularly in the dairy sector

Business lending continues to have moderate growth for a second quarter in a row - with some noticeable movements in market share between banks with both ASB and Kiwibank growing well above the others.     

ANZ continues to lose ground in both Agri and business - with BNZ now consolidating their top spot in the business sector.

And it's probably no surprise to see the continuing debt repayment in Agri coming nearly solely from dairy

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Reflections on 5 years in business. What have I learned?

Dec 24, 2021 8:22:18 AM / by Scott Wishart posted in Debt, Action, Planning, Budget, Banking, Strategy, Graduate

1 Comment

As we round out the year, I want to thank all of our clients and industry professionals that we deal with for your support this year.

Next year marks 5 years of NZAB. A tremendous milestone and one we are hugely proud of. 

As is natural at this time of year, I’m feeling a bit reflective so wanted to close the year out with a few of my own thoughts after 5 years of business ownership and leadership. 

Panic slowly

I heard this phrase the other day and it resonates with me. It was in the context of environmental regulation and changes that we will be required to make over the coming years. 

How I interpret this is that the key thing we can do is develop a mindset that is accepting that things will need to change, be open to all possible solutions, but be careful and deliberate with implementing them. Don’t rush, don’t react, but don’t ignore. When the time comes, execute carefully. But make sure you execute!

Head space

This ones personal for me. The old grey matter has been pushed to the limit this year, and for the first time I put up the white flag and asked for help. I also took some time off and deleted my emails off my phone. It was only for two weeks, but the difference it made was unreal. I had burned out. 

What I’ve learned is that you can be a leader and still need time off. You can be highly engaged in what you’re doing and still need time off. You can be in the middle of some really complicated problems and still need time off. You can put your hand up and ask for help and people don’t think less of you. Ironically I’ve found it really powerful and I’ve made more progress since as a result. 

People are everything

As many of us are finding, getting staff is more and more challenging. It makes you realise what good staff can do and how hard it is to run a business without them. Invest in the good ones, don’t take them for granted, and find ways to empower them. In my experience it’s not always about the pay, but how you can engage them in the vision of your business and show them how they can be part of it. 

Get closer to your customers

As farmers we’ve been lucky to have our products sold through large meat or milk companies. They’ve worked to create markets of customers for us and that has allowed us to grow. But we have to really listen now to understand what our actual end consumers want. A lot of the changes being asked of us are driven by customer demand. Ask yourself what would your consumers think if they had to come to you and buy direct? Why should they buy from you and not from someone else? What improvements would they like you to make to your product? What farm practices would they not like? 

Protect your brand

Your brand is everything. We’ve probably all learned this to some extent while dealing with banks over the last few years. Your ability to access funding is often more about your brand than your financials. 

If things are going well right now due to increased cashflow, don’t sway out of your lane too far. Stick to your plan. Stick to your strategy. If the strategy needs to change, then be deliberate about it. Make a plan and get buy in before executing. What you do now when the spotlight is off you will be analysed in great detail the next time things get hard. 

But most importantly

Enjoy the journey! I seem to have to learn this one over and over again, but find the fun along the way. The kids are only young once. There will always be things that are urgent. You’ll always be under pressure to succeed. Even if that pressure only comes from within. My dad worked his arse off to build a business that would allow him to have more time later. He dropped dead in the paddock. The plan wasn’t complete. 

To our readers, thanks for your regular feedback. We love getting your thoughts and insights. We also appreciate all of you that forward our emails on and encourage more people to sign up. 

Have a great Christmas, and see you out there next year!

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When you’re fixing your interest rate - are you managing your own risk - or your banks’?

Dec 9, 2021 7:48:58 AM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy, Graduate



We’re having a lot of discussions at present with our customers about fixing interest rates given the increase in rates via recent OCR changes plus expectations of further rate increases which are being forecast by most economists plus the RBNZ.  

We’re also seeing those expectations being played out in the swap curve, where 5-year swap rates have moved from historical lows of around 0% to a peak of c. 2.8% recently.  

This has led to plenty of discussion about the merits of fixing versus floating.

This short article is not about the merits of fixing versus floating (we will outlay some considerations on this topic in an upcoming article), but to highlight a significant discrepancy that we’re seeing between banks at present with their various fixed rates, even when standardised back to the same customer margin.

Take a look at the below graph, which is a data set of four of the main banks depicting the margin above the swap rate for each term of 1-5 years.

Now, its important to note a couple of things here:

  1. This is based on a customer base margin of c. 2.5 above a typical BKBM for illustrative purposes only. We observe plenty of margins both higher and lower than this. 
  2. The colours of the graph are meaningless versus the normal colours of the main banks.
  3. This is only one data point and only one consideration out of many when discussing and then agreeing on an interest rate risk management strategy.
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Squeeze the Credit Balloon Somewhere and It’ll Pop Out Somewhere Else

Nov 24, 2021 8:08:55 AM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy, Graduate



Some big upcoming restrictions on new home loan lending, combined with banks’ natural desire to keep growing their book is going to mean that credit is going to look for a home elsewhere.  


We think it’s going to be Agri.





So let’s set the scene with some recent bank jargon for you that is going to be talked about more and more.

  1. CCCFA regulations
  2. New DTI’s
  3. LVR restrictions
  4. Tax deductibility changes
  5. Brightline tests

The last three you would have all heard, but the first two are yet to impact. I’ll touch on them shortly – but to start with - guess what all of these measures have in common?

Well, they’re all designed to take the heat out of the residential market given the drastic house price increases of late plus win back the political football that housing has become of late.

And guess what - they’re starting to bite.

Whilst credit growth in the home loan sector is still increasing month on month it’s useful to look ahead at expectations for change in future.  


One of the best gauges for those future expectations is the “Credit Conditions Survey”, conducted every six months by the RBNZ.  

This survey is relatively simple the RBNZ asks banks what they expect both the demand and supply of credit in each of their lending sectors (residential, consumer, SME, Agri, Corporate) will be over the next six months.  

They are sentiment based questions but given the banks do control the puppet strings of capital availability, its pays to take notice.

And the results are starting to show some very stark trends. The expected demand and more importantly, the expected supply of capital to the home loan sector is expected to significantly pare back over the next six months.

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Real ideas to help the next generation into farming, whilst enhancing value for those exiting.

Nov 16, 2021 10:36:16 AM / by Tom Laming posted in Debt, Action, Planning, Budget, Banking, Strategy, Graduate


Continuing on with the theme of getting the next generation into farming, Tom Laming talks in this article about his own family story, and then lays out some mindset and capital structure considerations that might help.

My grandparents immigrated to New Zealand from the Netherlands in 1950. Like many of their countrymen, bruised and battered post-war, the idea of a fresh start on the other side of the world held great appeal. And so with four children in tow (including a six month old son), some personal belongings and a container of furniture that would follow later, they embarked on a journey to a new world.

With plans to work on the wharves of the best available port turned upside down by the 1951 waterfront dispute, my Grandfather turned to farming (an industry he had little to no background in) to provide for his growing family.

After moving around a few jobs in South Canterbury, he and my Grandmother and their now seven children settled in Waimate on their own farm in 1960. Talk about a land of opportunity – ten years after hitting the shores of New Zealand they were in a position to buy their own piece of land, having come to the country with little more than a desire to work hard and some good old-fashioned Dutch spirit.

I think you could categorically say that you wouldn’t find a story like that today, yet 60 years ago that pathway was pretty commonplace.

What’s really interesting is how our family’s ties to the rural sector have evolved since.

Of their four boys and three girls, three of the boys went farming, one became a vet and the three girls all married non-farmers (although they all maintained very close ties to the home farm).

Being prolific Catholic breeders, those seven children produced 30 of the next generation. And at the last count, only three of my generation are actively farming, with a few more of us retaining ties via professional endeavors to the land.

So, an industry that supported my grandparents into their own purchase in ten years, that provided such a great upbringing for many of us, has only held three in active farming roles.

And you will find many similar stories around the country. Where bright and driven minds brought up within farming businesses have left the industry altogether, taking their skills and the lessons learned from farm-life and parlaying those into success in other industries.

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Our Investment in Growth Continues

Nov 9, 2021 9:59:11 AM / by Scott Wishart posted in Debt, Action, Planning, Budget, Banking, Strategy, Graduate


It has been a busy couple of months for NZAB! Our strategy of continuing to invest in hiring the best people and being accountable to our customers is continuing to pay off.

I'd like to introduce three new staff to our business and one internal promotion. We've also successfully concluded our first graduate programme intake and hired our first graduate who starts next year (more about that in a future email).

Cameron Black has relocated from our Christchurch office to Invercargill and has been promoted to Client Director. We are really proud of Cam, he was our first employee and has very much been a core part of our growth to date. It has always been a goal of his to get to a point where he could head back home to Southland and build a long term career helping farmers be successful. We can't wait to see what he achieves in this next phase!

Alongside Cam, we have also been joined by Jennifer Horn and Anna Case who have joined NZAB as Associate Client Directors to support Michael, Grant and Cam.

Southland has always been an important focus area for us, so it is really exciting to now have a team of five on the ground in Invercargill!

Additionally, we have been joined in Christchurch by James Schrader as an Associate Client Director supporting Nathan, Nick, Cam Blain and Jordain.

Scroll down to learn a bit about our new team members.

NZAB is now a team of 22. That's something we are pretty proud of. Thankyou to our customers for giving us the right to exist and grow alongside you.

Here's to the journey ahead!

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