ANZ Banking Group has announced that it has increased its exposure to agriculture by $3 billion in the past year by participating in some of the biggest agriculture deals in the last twelve months.
According to the article on The Land, ANZ has supported Australia’s manufacturing sector and has lifted its exposure to it almost twice the size of its credit exposure to the resources sector.
Two years ago ANZ approached Port Jackson Partners to write a report on the agriculture sector. The results showed that around $400 billion would be needed to support farm turnover in Australia by 2050.
“The size of the prize to agriculture calls for timely, transformational actions,” it said in the report.
The bank, which released its half-year results on Thursday, has credited the Harris family’s buyout of Clyde Agriculture’s remaining Australian rural properties and also advised on the Chinese purchase of prized farms in Victoria’s western districts.
ANZ Chief Executive Mike Smith said agriculture was one of the very few sectors in the Australian economy to remain relatively unaffected by recent economic difficulties.
“The top end of the agri-sector is going extremely well,” Mr Smith said.
ANZ’s half-year results revealed that the bank had slightly reduced its non-performing loans in the agriculture sector, which currently stand at $1.12 billion or approximately 3.5% of the bank’s agricultural exposure.
The value of such non-performing loans is the largest of all ANZ’s banking categories. In the past year, the bank had to deal with troublesome agricultural loans such as Casterton and Burslem stations in central Queensland, which were sold off for $4.8 million.
According to the Australian Bureau of Agricultural and Resource Economics, property makes up most of the lending and funding land purchases accounts for the largest share of debt on broadacre and dairy farms, standing at 44% and 47%, respectively.
