Rabobank New Zealand said profit rose 31 percent to a record in 2014 as the local unit of Netherlands-based Rabobank Group increased rural sector lending and kept costs under control.
Net profit was $105.5 million last year, from $80.8 million a year earlier, the Wellington-based company said in a statement. Net lending growth in 2014 was $342 million and rural lending grew by 4.5 percent, which Rabobank said was faster than overall growth of 4.3 percent in the rural debt market. The figures were provided in a two-page statement and the local unit hasn't yet posted its financial statements with the Companies Office.
The profit gain "reflected a combination of stable income, low loan provisions and low growth in costs in 2014," said RNZL chief executive Ben Russell.
"By and large, our rural banking clients across virtually all sectors, had a successful year financially in 2014," he said. "The impact of the drought and lower milk prices will affect client profitability in 2015 and 2016, however Rabobank expects a more sustained recovery in milk prices from 2016 onward."
The lender said it added $196 million in client deposits last year, with the majority raised through its RaboDirect online retail savings business.
The local Rabobank business retained its profits, "to bolster RNZL's already-strong capital ratio and to reinvest for further sustainable growth in the food and agribusiness market," Russell said.
RNZL's total capital ratio was 13.94 percent last year, it said.