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Australia's Westpac to lend A$100 million to drought-hit farmers

By Paulina Duran

 

The remaining cattle on farmer May McKeown's drought-affected property, located on the outskirts of the northwestern New South Wales town of Walgett in Australia, eat hay July 20, 2018. REUTERS/David Gray

 

SYDNEY (Reuters) - Australia's Westpac Banking Corp said on Thursday it would disburse A$100 million ($74.2 million) in cheap loans to farmers as a record dry spell hits parts of the nation, while the country's lenders fight to regain public trust amidst an ongoing misconduct inquiry.

 

The drought in Australia's east, one of the worst on record, is impacting every area of rural life, often with global trade and price implications. Already many cattle graziers are being forced to sell stock they can no longer feed.

 

Westpac will offer some affected farmers loans at "heavily-discounted" rates and would also give impacted customers the option to defer their loans for up to 12 months, Australia's second largest lender said in a statement.

 

"This is the first time in Westpac's 200-year history that we have set aside such an amount to provide immediate and long-term financial relief to our agribusiness customers," National Agribusiness Manager at Westpac said.

 

The Sydney-based lender said it had expended its agribusiness team by 15 percent to offer options to customers such as financial relief from deferred debt repayments and fee wavers. It did not specify the discounted rates on offer.

 

Farm banking in hot, dusty Australia has long been tough and although it is a small component of overall books, rural loans are some of the riskiest and most politically sensitive.

 

Last month, Westpac's smaller rival, National Australia Bank, moved to soothe public anger after a major misconduct inquiry showed it dealt harshly with rural borrowers in distress, saying it won't penalize farmers for loan defaults due to the drought.

 

The other two members of Australia's powerful banking oligopoly controlling about 80 percent of the market - Commonwealth Bank of Australia and Australia and New Zealand Banking Group - have also moved in recent weeks to offer farmers some relief.

 

CBA offered offset accounts on their mortgages, while ANZ said it would suspend loan repayment for up to three months, waive restructuring fees and committed not to increase interest rates to distressed customers.

 

Neither of Westpac's three competitors quantified the cost of their drought-relief measures.

 

(Reporting by Paulina Duran; Editing by Gopakumar Warrier)

 

-- © Copyright Reuters 2018-08-09

[lanista]

If its not droughts its floods. You can never make those dopey farmers happy.  Many aussie  farmers have their laid back rural lifestyle subsidized by the city tax payers. Afew decades back some relatives of ours in the Riverina district received a Federal gov bailout along with other farmers and rurals.

 Did they buy a new tractor or put in cash crops ?   NO..They put in an inground swimming pool !

 

Do you think theyre going to pay back 100 million to the bank?  Dream on.  Fed will foot the bill.

 

 

[Blackheart1916]

Damage control and PR spin.

[John1012]

Perhaps if the government did not disburse such large sums as overseas aid they could afford to help the farmers with grants so that commercial loans were not required. Take the cheque book away from the Bishop.

[tryasimight]

watch the movie " The Bank".

[thaibeachlovers]

Sounds like the bank wants to go into the land business. What's plan B when they can't pay the loans back?