'No need for ­moratorium', say banks

15 Dec, 2014 05:10 AM
We are not about to toss anyone off their land in NSW and Queensland - we don't need a ­moratorium

THE chief executive of Australia's biggest bank has refused to cave in to political pressure and impose a mora­torium on farm receiverships.

Commonwealth Bank of Australia's (CBA) Ian Narev responded to allegations on a radio program with Alan Jones that the CBA-owned Bankwest was "terror­ising" farm clients and should stop collecting mortgage payments from drought-stricken farmers in the same way ANZ agreed to on Thursday.

Mr Narev said his agribusiness head had told him: "Ian, we are not about to toss anyone off their land in NSW and Queensland. We don't need a moratorium."

Federal independent MP Bob Katter said that without a moratorium he believed up to 2 million cattle could die. But he admitted some farmers shouldn't be farming. "I can't save every farmer and it's not desirable that we do. It's healthy for 3 to 4 per cent to be dropping out every few years."

CBA will provide a business loan or mortgage repayment holiday for farmers and interest-free periods for an agreed term, extend the business or mortgage loan term agreement and waive fees and charges.

Australia's biggest agribusiness lender National Australia Bank (NAB) and Rabobank have taken similar measures. Rabobank said it would not offer a moratorium but said its farm assistance package for drought-affected farmers, which started in ­February, was working well.

That package includes "carry on" finance to keep viable operations running and a waiver of break costs on early redemption of Farm Management Deposits to allow access to funds.

NAB said there was no need for a moratorium. Of the bank's almost 30,000 agribusiness customers across the country, it has foreclosed on seven customers in Queensland and north-west NSW in the past 12 months.

"We currently have no plans to ­foreclose on any [more] of our drought-affected customers in Queensland and north-west NSW. Foreclosure only occurs after a lengthy period of ­consideration and evaluation that includes an extensive farm debt ­mediation process," the bank said.

In April last year The Australian Financial Review reported that at least 80 significant farming ­operations across Australia, worth more than $1 million each, were in receivership or some form of distress, and that there were more likely to fold due to high costs, depleted income and sliding land ­values.

In June last year the Supreme Court of Queensland issued a warrant for the seizure of two cattle stations at ­Hughenden in central Queensland, after an application from receivers PPB representing the ANZ Banking Group. That incident was the beginning of several messy receiverships in the ­central Queensland area.

Richmond Mayor John Wharton and receivers representing his bank reached boiling point in 2012 after the two sides ended up in a dispute about the sale process of about $7 million worth of auctioned cattle stations.

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15/12/2014 6:02:58 AM

Banks will make land values slide further and income earning capacity of farms evaporate - a moratorium is urgently needed NOW !
15/12/2014 8:10:18 AM

Some of us looking to expand don't need the Govt to make it harder.
Top Ender
15/12/2014 9:17:18 AM

Not sure that land values decreasing actually effects the income earning capacity of said land. In fact if the value of the land decreases, then the ability of the said land to generate a reasonable rate of return should increase.
15/12/2014 10:07:00 AM

Top Ender and Jacky hitting the nail on the head, land values decreasing are a good thing for those looking to expand or buy in.
15/12/2014 11:34:47 AM

Jacky, a bank that will loan you money you can't pay back is not doing you a favour.
15/12/2014 1:21:36 PM

Perhaps Qlander; Top Ender, James and Jacky will only take out loans that they (not the bank) asses they can pay back
15/12/2014 1:28:22 PM

q,lander, are you kidding. did the bank put a gun to their head and make them borrow the cash...??? It's business, people make decisions based on risk assessment. If it goes wrong, it goes wrong... No one elses fault but your own.
16/12/2014 5:37:59 AM

Qlander, so why borrow money if you know you can't pay it back?
16/12/2014 5:46:14 AM

Qlander, Surely it is the responsibility of the borrower to determine whether a proposed loan is repayable. We can't blame the banks for everything.
16/12/2014 9:58:23 AM

read my comment guys.
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