Impairments dragged Rabobank NZ net profit lower in 2022

Rabobank New Zealand chief executive Todd Charteris. Photo / NZ Herald

Rabobank New Zealand group’s 2022 net profit fell by 7.5 per cent to $193.40 million due to impairments and higher expenses, the agriculture lender said.

While impairments in 2022 were negligible at a loss of just $2.2m, this differed significantly from 2021 when an impairment release of $27m contributed positively to a strong lift in net profit, the bank said.

Other factors contributing to the fall in net profit were higher operating expenses and lower non-interest income.

Rabobank continued to build its rural lending portfolio in 2022, reporting net lending growth of $1.28 billion for its New Zealand banking group.

New Zealand chief executive Todd Charteris said the bank’s strong portfolio growth during 2022 highlighted its commitment to the food and agribusiness sector.

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Rabobank continued to grow the New Zealand business by reinvesting profits back into the sector over the year.

“With farmer margins currently squeezed by inflated farm input costs and many farmers still in recovery mode following adverse weather events earlier in the year, the New Zealand agricultural industry is now facing a number of headwinds,” he said.

“However, we are positive about the long-term prospects for the sector and will continue to back our clients and explore new lending opportunities in the year ahead.”

The bank’s food and agri lending book grew to $16.07b in 2022, up by around 9 per cent on the prior year.

The agricultural lending portfolio (inside the farm gate) grew substantially in 2022 and, combined with strong growth in Rabobank’s corporate post-farm gate portfolio, resulted in net lending growth of $1.28b to the New Zealand food and agri sector, Charteris said.

The bank’s savings division – Rabobank Online Savings – also recorded good portfolio growth.

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The overall deposit portfolio stands at $5.73b.

Rabobank New Zealand is a part of the global Rabobank Group, which operates in 38 countries.