Henry van der Heyden has been appointed chairman of Rabobank New Zealand Limited, replacing John Palmer who has retired from the board.

Van der Heyden, the former chairman of Fonterra Cooperative Group, has been a director of the bank since 2012. Palmer's director seat will be filled by Scales Group managing director Andy Borland, the bank said in a statement.

Rabobank, owned by Netherlands-based Rabobank Nederland, is one of New Zealand's largest rural lenders after setting up here in 1998 when it bought the former Wrightson Farmers Finance banking business. It also provides corporate and business banking to the food and agribusiness sector and online retail savings and investments business RaboDirect.

Wiebe Drajer, chairman of the International Rabobank Group, said the bank was fortunate to have someone of van der Heyden's calibre take over the chairmanship of its New Zealand operations.


In its June disclosure statement under material matters, Rabobank said while there had been a modest increase in farm gate milk prices off low levels, they remained at low levels.

"Very low prices for an extended period would likely increase dairy farm loan defaults and the potential for higher loan loss provisions in the bank's dairy portfolio," it said.

Loans to dairy farmers make up more than half of the bank's overall portfolio which stood at just under $9.5 billion in the year ended Dec.31, 2015.

Total impairment losses for the six months to the end of June were $10.3 million, compared to $834,000 in the comparable six month period in 2015.

The bank's total capital ratio is 13.52 per cent, well above the 8 per cent minimum requirement and 2.5 per cent buffer ratio.