BOQ finds ag niche

12 Dec, 2012 02:23 PM
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BOQ's business, private banking, agribusiness and financial markets boss, Brendan White.
BOQ's business, private banking, agribusiness and financial markets boss, Brendan White.

AFTER copping a costly drubbing from cyclones, flooding and the investment property slump, Bank of Queensland (BOQ) looks to have found a handy new niche to help revive its lending business - agriculture.

Less than 12 months after launching its agribusiness banking division BOQ says customer support for its farm sector initiative in Queensland and NSW has taken management by surprise.

The bank's first 11 agribusiness managers, appointed since July, are likely to see their ranks doubled in 2013 if current levels of new farm sector business continue.

"We could easily be doubling our agribusiness numbers next year if we continue this momentum," said BOQ's business, private banking, agribusiness and financial markets boss, Brendan White.

"We're predominantly Queensland and NSW, but looking to opportunities further south as our regional agribusiness hubs establish."

Early customer support for the bank's specialist appointments in rural centres - from Mackay in northern Queensland to Wagga Wagga in the south - has been a refreshing change for the BBB-plus rated lender which posted a full year loss of $17.1 million in October.

It was the first full-year loss by an Australian bank in 20 years, caused primarily the institution's bad debt and insurance exposure to southern Queensland's struggling property and tourism markets and economic setbacks after severe summer weather events in 2010 and 2011.

BOQ has bounced back in an upbeat mood after stabilising its asset base and reporting a profitable finish to 2011-12.

"We're pleasantly surprised by the response we've had from the farm sector - it's been a real compliment to the quality team we've pulled together," said Mr White, who previously headed up Commonwealth Bank of Australia's (CBA) regional and agribusiness division.

"We don't want to compete head-to-head with the big players - we don't see our role as being everything to everybody.

"Our agribusiness skills are primarily in the cotton, cattle and cropping space, although as the team grows and the footprint expands we'll be building our expertise.

"Agiculture is already banked very well by the big four majors, but this is also a relationship business and we've focused on building what we think are optimal arrangements for our expanding client base."

The bank made its move into farm lending in February after a history of being well entrenched in home mortgages, including regional lending through franchised branches.

"We have a good rapport with many regional communities because of the way we're structured," Mr White said, pointing to BOQ's network of owner-manager run branches in more than 200 locations Australia-wide.

"These are people experienced in community and commercial lending who have also picked up a broad spread of agricultural understanding."

He felt community familiarity with BOQ and its regional customer relationships had spilled over to support BOQ's agribusiness initiative.

At the same time other banks were sending mixed messages by rationalising numbers or activities in regional areas as part of their corporate response to tighter economic times.

BOQ facts

  • Founded in 1874 as Brisbane Permanent Benefit Building and Investment Society, merging with City and Suburban Building Society and Queensland Deposit Bank in the 1920s and '30s.
  • Publically listed as newly-renamed BOQ in 1971
  • Became a big ATM equipment supplier in 1990s
  • Branches opened in NSW and ACT from 2004
  • Network run by local branch owner-managers now covers all States and Territories
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    READER COMMENTS

    Starch
    12/12/2012 4:58:17 PM

    Nice to see an alternative to the big banks coming into agribusiness - can only be a good thing, and at least this bloke sounds like he knows what he's on about.

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    Sorry did i get it wrong..? Rankins Springs is still open..?!
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    No doubt a few frosted Freddies out there who will wish they had taken a closer look at the AGC
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    Matthew, I was wondering if you had followed up this story with the farmer after the whole