Elders Bank reports strong first year profit
Elders Rural Bank has reported a $10.25 million profit in its first year of operation to establish a strong presence in the rural finance market with strong growth in lending and deposits.
With profitability rising as operations expanded, Elders said buoyant rural conditions in much of Australia helped it to beat first year profit targets. This was achieved despite the extra costs of turning the finance services business into a bank and the higher associated costs in running a full banking operation – around $1 million dollars a year.
In a buoyant climate farmers were able to pay down previous debt, upgrade equipment which helped lift its total loan book to over $1 billion as the low Australian Dollar helped boost export commodity prices. Investment in rural property also picked up with the ‘exceptional’ quality of the loan book reflecting improved trading terms.
Elders Rural Bank is a joint venture between Futuris and Bendigo Bank with the latter providing an extra 130 rural outlets to Elders existing 400 strong branch network.
The bank has successfully leveraged off the Elders branch office network to supply the new banking services, keeping overheads low. This has allowed the new bank to benefit greatly from existing client relationships.
‘$10m for full service bank’, Chris Milne & Calvin Noack, The Daily Telegraph