ANZ Banking Group has jumped on board with its own drought assistance offer after a busy week of revised lending arrangements for farmers and farm services businesses.
It will cut interest rates for variable business lending to farmers by one per cent and set aside a $130 million fund for extra low interest loan help.
The bank has also lined up with other major agribusiness lenders promising to fall into line on farm management deposit (FMD) interest rate offset arrangements for farmer borrowers.
It has “committed to provide a solution for customers eligible to offset their FMDs against primary production income in line with current legislation”.
The bank has not yet spelt out exactly what its FMD offset offer will involve.
ANZ’s Australian business and private banking group executive, Mark Hand, said the FMD proposal would not necessarily immediately help farmers in drought, but it would be additional support as they planned for future seasons.
Westpac, Rabobank and Commonwealth Bank of Australia also responded to calls for offset arrangements this week after federal Agriculture Minister, David Littleproud, made a point of highlighting how the opportunity to help drought-stressed producers was being ignored by major rural lenders.
Mr Hand said ANZ’s $130m low interest fund would provide immediate cash flow relief to farmers, while the variable loan interest rate reduction could help them prepare for next season, when hopefully harsh seasonal conditions will ease.
The variable interest rate reduction will apply for 12 months to family and small farming enterprises currently holding business loans with the bank
It is effective from September 1.
It means customers with a variable rate loan of, say, $300,000 should save up to $3000 in interest costs in the year ahead because of the 1pc discount.
We hope our relief package provides the support our farming customers need
ANZ’s current drought relief package also includes a continuing moratorium on farm repossessions in drought-declared regions; waiving fees associated with restructuring business loans; a longstanding commitment not to increase interest rates on distressed customers, and suspending of loan repayments, including credit cards, for up to three months.
Last week the bank also donated $1m to charities helping farmers struggling with drought.
“We hope our relief package provides the support our farming customers need at this difficult time,” Mr Hand said.
ANZ was committed to Australian agriculture and supporting farmers through the drought.
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