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.  

(*Note: "other" includes SBS, TSB, Co-op Bank, ICBC, BOC, BOB and BOI. Rabobank includes Rabo Group lending).

Loan growth across all NZ sectors has settled into a relatively stable 3-4% p.a. over the last few periods, but there are some standouts in the data.

1. Kiwibank continues their rapid system growth of 9.7% (annual), almost three times the average. 
2. Heartland is losing lending volumes - this is surprising given their push into home lending, but the numbers aren't supporting the strategy.
3. "Other " - also growing very strong - The big growth banks in here are Bank of China and Industrial Commercial Bank of China.

(*Note: "other" includes SBS, TSB, Co-op Bank, ICBC, BOC, BOB and BOI )

Whilst the YOY growth in Agri debt is flat, it was a game of two halves as significant repayments occurred in the last 6 months via the dairy sector (see sector lending stats further below).

This period is also notable for Rabobank officially becoming NZ's second largest Agri lender*, overtaking BNZ.

There is an ongoing retraction at Westpac, down 3% in volume for the year, and a continual slide for ANZ. Combined with ANZ's massive retraction in business lending in the next graph, there's an ongoing theme of them continuing to reduce their lending in the productive sectors and placing it instead into home lending. 

Rabo continues to provide the bulk of the new Agri lending growth. 

*(this also includes "Rabobank Group Branch" loans in NZ which are also Agri)

Whilst ANZ 's ongoing march downwards with their Agri market share continues, Westpac showed an even larger reduction in market share, down 40bps.   

Rabo's market share is now at all all time high, gaining a very material 74bps of market share in the last 12 months.  

(*Note: "other" includes SBS, and TSB, Co-op Bank, ICBC, BOC, BOB and BOI )

Year-on-year business lending growth has picked up significantly, matching the growth in home lending.   

Whilst ANZ shed $1.2bn in business sector loans over the last 12 months, Kiiwbank (+14.8%), BNZ (+4.0%) and ASB (+3.6%) all picked up the reins. 

It's a small volume number, but Heartland also shed 7.2% of business loans - material when in proportion to their entire business lending.

In line with their reduction in business lending, ANZ lost 1.7% of market share in business banking - an extraordinary drop for a one year period. 

Kiwibank & BNZ were the benefactors, all picking up notable chunks of the market. 

(*note difference in Agri loan total data vs split bank data above due to other non - registered bank lenders not being in bank split data)

This is the game of two halves - this six month period saw a significant drop in Agri lending on the back of a strong dairy payback, but the prior six months saw an increase of $900m, meaning flat growth overall. The small increase in mixed cropping and sheep and beef lending is somewhat surprising given the period covered was some of the hardest for sheep and beef farmers and most were incurring losses. Ironically we expect lending volumes to increase more significantly from here as the improving sector performance leads to re-stocking at higher stock costs and hence larger cash demand in the short term.

*Note Kiwibank and Other not included for immateriality reasons

In the last 6 months, provisions have been largely flat. This flat lining is likely to be the balancing of risk between an improving dairy situation, but a sheep and beef sector that remains under pressure (for the period to Dec 24). We would expect this to improve from here as the better red meat sector returns start to flow through to farmers, although we may have to wait a further 6-12 months for that.   

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