News & Insights

The Real Cost of Not Competing for Capital

Jul 4, 2025 10:54:45 AM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy

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Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

In our previous article, What a Decade of Floating Rates Tells Us About Agri Finance Confidence, we explored how floating interest rates have behaved over time and how bank appetite has shifted in response to rising rates. The core message was this: while interest rates have moved in cycles, the bigger issue has been how confidence—both from banks and farmers—has fluctuated alongside them.

Now, we want to take that discussion a step further.

 

Same graph. One big addition.

This time, we’ve layered in a second line—the red one. This represents the non-competitive floating rate, or in plain terms, the rate paid by a farmer whose credit wasn’t quite as good (or wasn’t articulated well enough) and hasn't actively engaged in a competitive lending process. It’s someone who, for whatever reason, hasn't negotiated, hasn’t benchmarked, and hasn’t brought an advocate like NZAB to the table.

The green line, as before, is the competitive rate—what’s available when a farmer actively shops their deal, presents a strong case, and gets support to navigate the lending environment.

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What a Decade of Floating Rates Tells Us About Agri Finance Confidence

Jun 5, 2025 11:28:55 AM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy

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Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

Over the past 10 years, interest rates in New Zealand, particularly rural floating rates, have taken farmers on a wild ride.

We’ve pulled out the data from RBNZ to show the 90-day bill since 2015.  However, instead of just showing that underlying rate on its own, we’ve added a customer margin to reflect the total rate payable for an “above average credit quality customer in a competitive situation”. This data set includes margin changes (reductions) during that time. similar to what we observe with our own customers over that period.

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Why Has Australian Agri Debt Surged While NZ's Has Flatlined?

May 29, 2025 9:32:19 AM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy

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Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

 

While working on a recent project for a large Australian asset holder, I came across the Reserve Bank of Australia’s consolidated Agri debt figures. I decided to compare them with the New Zealand data.

The result is striking.

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The Smart Farmer's Guide to Dairy Conversion

May 19, 2025 11:45:52 AM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy

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Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

There’s increasing chatter about dairy conversions again—especially here in Canterbury—and it’s easy to see why. In many cases, the extra returns far outweigh the costs. That contrast becomes even starker when compared with lower-yielding farming systems.

Turning a non-dairy farm, whether sheep and beef, deer, or cropping, into a dairy platform is a major strategic move. While dairy can offer strong cashflow and asset growth, it also demands serious capital, operational change and long-term commitment.

At NZAB, we’ve helped fund countless dairy conversions and seen the highs and lows of the sector. Below are some hard-earned lessons worth considering.

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Agri Lending Market Share Changes

May 12, 2025 2:06:14 PM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy

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Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

As a follow-up to the Agri Banking Dashboard that we recently circulated, we thought we’d share a couple of graphs illustrating the changes since 2018.

Firstly, market share changes since 2018:

 

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The NZAB Banking Dashboard

Apr 3, 2025 4:17:24 PM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy

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Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

We’ve dived back into the RBNZ data to see all the main bank movements over the last six months (to December 2024) - all the changes in lending, who’s winning market share and who’s losing it - in both the Agri and Business Lending Sectors.

In this Issue:

  • Total loan growth over the last 12 months among the registered banks was ~$17.4bn - consistent with the prior period.
  • However, of the $17.4bn, Agri lending was flat and whilst business went ahead $3.0bn,- this still means the vast majority of new capital went into the home loan sector once again ( +$14.5bn).
  • ANZ continues to shed Agri and business loans - collectively they lent  $1.3bn less to these sectors over the last 12 months (and $0.94bn over the last 6 months), whilst at the same time increasing home loans by $3.4bn. 
  • The four main Australian banks collectively lent $11.3bn to the home loan sector over the last 12 months, but only advanced lending to business and farming by $0.93bn.
  • Rabo officially became the second largest Agri lender in NZ, surpassing BNZ and increasing market share by 74bps for the year.  
  • Dairy loans continue their ongoing repayment profile, reducing by nearly $400m for the year. We expect this to pick up from here with significantly more dairy cash coming in over the second half of the year.   
  • Agri lending provisions were largely flat over the year, continuing the ongoing low levels seen in this sector.

As always, please sing out if you have any questions or would like to use the data in your own presentations or engagement with customers. We would be happy to provide a digital version for sending.  

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Our wish list for the new RBNZ Governor

Mar 27, 2025 3:46:52 PM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy

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Noticing a bit more Agri Credit Appetite Recently?

Feb 25, 2025 10:04:14 AM / by Andrew Laming posted in Debt, Action, Planning, Budget, Banking, Strategy

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What we need is more competition right?

Feb 20, 2025 7:33:57 PM / by Scott Wishart posted in Debt, Action, Planning, Budget, Banking, Strategy

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A discussion with The Government about Agri Lending

Feb 5, 2025 4:18:25 PM / by Andrew Laming & Scott Wishart posted in Debt, Action, Planning, Budget, Banking, Strategy

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