what happened, page-17

Hi muppets,

whilst we are dealing in generalisations trying to group the actions of all rural lenders together, the fact is you are wrong.

After the rural lending debarcle of the late 80's when the banks found themselves in the press regularly foreclosing on farmers and repossessing land (and the resulting Rural Debt Mediation Act in NSW) major big 4 bank lenders such as NAB Agribusiness moved to a very conservative 40% LVR on land with 50% as flagging of concern (very few farming enterprises can sustain loans anywhere near these levels in any event.) Several key agricultural industry academics suggest the majority of agricultural businesses cannot sustain LVR's much above 10% on an ongoing basis.

Naturally there will be a range of lending practises across the banks but the fact remains that of the roughly 100 debt mediations in NSW last year(the only State where this is formally required) the banks have featured in a very small minority of them.

Rural advisors have recently noticed a much more aggressive lending effort by some banks into the rural market but it is very specifically targeted to top performing farmers with low LVR's and good histories of profitability.

This cherrypicking can only further accentuate the concentration of poorer quality lending with the second teir financiers.

I'm always interested though if you have any specific information to back up the claim that big four banks are making NEW rural loans at 60% ?

Cheers,