Branch closures add to farmers’ bank concerns
Concern about branch closures can be added to the continued slide in farmers’ satisfaction with their banks, the latest Federated Farmers Banking Survey shows.
More than 1100 Feds members responded to the May survey and 71 percent of them said they were concerned about bank branch closures. Of those who were concerned, 42 percent said they needed branches to carry out their business and 56 percent were worried about the impact of closures on their local communities.
‘‘Provincial towns are under all sorts of pressures, with workforce gaps, farm jobs disappearing as productive land is planted out in pines for carbon credits, competition from on-line sales trends that all retailers face, to name some of the factors,’’ Federated Farmers President and commerce spokesperson Andrew Hoggard says.
‘‘Bank branch closures are just another hit on confidence, making doing business in rural areas that much harder, and another reason for young people to look to cities for their future when agriculture is the main way New Zealand earns its living in the world.’’
The six-monthly survey, run with the help of Research First, found 62 percent of farmers are satisfied with their bank relationship, down four points on November and a continuation of steady erosion in satisfaction over the past five years, when it was over 80 percent. Meat & wool and arable farms are the most satisfied, ‘other industry groups’ least satisfied.
‘‘Just on 18 percent of farmers said they’d been feeling
under pressure from their banks – that’s down half a point on six months ago, so that’s stable. Arable farmers are feeling the most pressure, when in earlier surveys of late it has been dairy farmers,’’ Andrew said.
Some 58 percent of farmers said communication with their bank has been good or very good, down four points on November. As with overall relationship satisfaction, that sentiment has been eroding steadily over recent years.
The May survey also threw in a question about banks phasing out cheques. Five percent of respondents said they use cheques and don’t have easy access to alternatives; ‘‘I would suspect a reflection of poor internet connectivity in their locality,’’ Andrew said.
Another 61 percent said
they don’t use cheques but are concerned about people who don’t have easy alternatives; 34 percent are ‘not concerned’.
Other findings:
• 24 percent of farmers say their lending conditions have changed over the past six months, down three points on November. Of those with changed conditions, 14 percent were tougher and 10 percent easier.
• Otago-Southland and Auckland continue to be the regions with farms most satisfied with their banking arrangements. In contrast, West CoastTasman-Marl borough and Waikato-Bay of Plenty farms were the least satisfied.
• Average mortgage interest rate was 3.8 percent down from 3.9 percent in November. Ninety-one percent are paying mortgage interest rates of less than 5 percent.
• Average overdraft interest rate was 6.3 percent, down from 6.4 percent in November. Twenty percent are paying overdraft interest rates of less than 5 percent.
• 79 percent of farmers have a mortgage with an average value of $4.3 million and median value of $2.2 million. Arable farms had the biggest average and median mortgages, even bigger than dairy farms. • 78 percent of farmers have an overdraft with an average value of $193K and median value of $100K. Arable farms also had the biggest average and median mortgages.
• ANZ had the biggest market share for both mortgages and overdrafts.
• Farmers are most satisfied with Rabobank and Westpac.