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Performance of the banks tracked as rates hold steady
5 March 2013
As the Reserve Bank of Australia decides to leave interest rates on hold at three percent, the National Farmers' Federation (NFF) has today released the latest Agribusiness Loan Monitor, providing much-needed information to farmers about their agribusiness loan rates.
The February Monitor, the first for 2013, shows the banks reaction to the RBA's December rate cut over the past two months.
"All financial lenders have now passed on a rate cut of between 0.15 percent and 0.20 percent in response to the RBA's 0.25 percent December rate cut," NFF CEO Matt Linnegar said.
"Some of the banks moved quickly in response to the RBA, while others were slower to pass on the cut, but the positive news is that all the banks have now moved rates in either their term loans or their agribusiness loans, or in many cases, both.
"This is positive news for farmers, even though the banks have restrained their cuts to between 0.15 and 0.20 percent. We, of course, urge them to pass on the full rate cut of 0.25 percent," Mr Linnegar said.
"This month's Monitor also provides a new tool for farmers – a tracking of movements in rates over the course of the financial year. To date in 2012-13, the RBA has cut rates twice; bringing the rate down 0.50 percent to 3 percent.
"The banks have followed suit in this time, reducing their rates by between 0.15 percent and 0.40 percent for term loans, with the best performing banks being Commonwealth Bank Agribusiness and NAB Agribusiness, both of whom have reduced rates by 0.40 percent since July 2012.
"Meanwhile, in overdrafts, four banks – ANZ Agribusiness, Commonwealth Bank Agribusiness, NAB Agribusiness and Suncorp Agribusiness – have all reduced their rates by 0.40 percent since the beginning of the financial year.
"While no banks have passed on the full 0.50 percent rate cut, it is pleasing to see that farmers are getting some rate relief from the banks. We encourage farmers to log on to www.nff.org.au to check the latest Monitor and see how their bank is tracking," Mr Linnegar said.
The February NFF Agribusiness Loan Monitor shows agri-term loans stand approximately four percent higher than the RBA cash rate, and at around one percent higher than standard variable mortgages.
The full February Loan Monitor, including the financial year-to-date snapshot, is available here. The Monitor is compiled each month by leading money market monitor Canstar and published by the NFF as a tool for all Australian farmers.
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