Rabobank statement on drought support

Rabobank statement on drought support

Agribusiness banking specialist Rabobank has advised of a range of measures it has in place to support clients impacted by current drought conditions, and confirmed it will not apply higher interest rates on loans in default due to drought and in cases of natural disaster.

Rabobank Australia CEO Peter Knoblanche said while the majority of the bank’s clients were managing the dry conditions (which are impacting New South Wales, Queensland and parts of southern Australia) well, and remained in overall strong positions, the bank was providing support where required through the current difficulties.

“There are some very challenging seasonal conditions in a number of parts of the country at the moment, with serious to severe rainfall deficiencies in large areas of New South Wales and southern to central Queensland, as well as other parts of eastern and southern Australia and some pockets of WA,” he said.

“In instances where support is required, the bank is working alongside affected farmers and agribusiness operators, as we have done in previous droughts, to mitigate the impacts of the dry weather and to ensure our clients are well-positioned to rebuild production and financial positions when seasonal conditions improve.”

Mr Knoblanche said as a global specialist in agribusiness, Rabobank took a long-term view on its clients’ businesses and understood climatic extremes, such as the current drought conditions and other acts of nature, were part of being in the agricultural sector.

“It is our standard practice to stand by our clients in times of adverse conditions, where circumstances are outside their control, and work with them individually to help deal with these problems,” he said.

Mr Knoblanche said the bank had a range of measures in place to assist drought-impacted clients and also confirmed higher interest rates would not be applied to loans in default due to drought (in drought-declared regions) or to natural disasters, such as floods, bushfires and cyclones.

“As a bank specialising in the agricultural sector and used to dealing with conditions like drought and other adverse climatic circumstances around the world, we have very good practices in place to support our clients whose businesses are drought-affected.  These are fair, compassionate and tolerant, and have been very effective in assisting clients manage through these difficulties,” he said.

Assistance measures for drought-impacted clients include:

  • ‘carry on’ finance to keep viable operations running,
  • waiver of break costs on early redemption of Farm Management Deposits to allow access to needed funds,
  • deferral of scheduled loan payments,
  • waiver of fees on loan increases necessary for rebuilding operations and
  • waiver of fees for equipment finance variations.

“Where required, measures include individual agreements reached with viable clients to hold off action for agreed periods to allow them time to work through their financial difficulties and re-build their financial position when seasonal conditions improve,” Mr Knoblanche said.

He said Rabobank’s (All in One) rural loans were also specifically designed for farmers to provide financial flexibility to manage through times of difficulty.

“They are flexible, interest-only facilities, which allow agricultural operators to opt to pay principal reductions when they choose, which is of particular benefit in times of reduced cash flow due to adverse circumstances, such as drought,” he said.

Mr Knoblanche said Rabobank’s loan facilities, unlike standard rural term loans, also provided options to enable farmers to proactively manage their interest costs.

“As a revolving line of credit combining transaction and loan facilities, the All in One facility offers advantages over standard term loans whereby income deposited reduces the debt, thereby reducing interest payments.  This can then be redrawn to the loan limit when needed to suit circumstances, such as seasonal conditions,” he said.

Mr Knoblanche said despite the current challenges with drought conditions in parts of the country, the outlook for Australia’s food and agricultural sector was fundamentally very sound, with a strong positive outlook.

“Both globally and locally, Rabobank has a very positive view on the future growth prospects for Australia’s agricultural sector,” he said.  “Over the past 10 years, we have significantly increased our operations throughout rural Australia, opening new branches and rapidly growing our rural branch staff.  And we are excited about continuing to expand and develop our business operations throughout rural Australia into the future.”

Mr Knoblanche said it should also be noted that some parts of the country which had previously experienced dry conditions– including areas of WA – were now enjoying improved seasonal conditions, leading to positive forecasts for harvests and improved profitability. “And this demonstrates the resilience and adaptability of Australian farmers in managing through these difficult times,” he said.

Any clients struggling with the impacts of drought, who were not already speaking to the bank, should contact their local rural manager or branch or phone Rabobank on 1800 025 484.

Rabobank Australia & New Zealand Group is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has nearly 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.6 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.

Media contacts:

Denise Shaw
Head of Media Relations
Rabobank Australia & New Zealand 
Phone: 02 8115 2744 or 0439 603 525 
Email: denise.shaw@rabobank.com  

Skye Ward
Media Relations Manager
Rabobank Australia
Phone: 02 4855 1111 or 0418 216 103
Email: skye.ward@rabobank.com