NZ special
O»
10
What's NewS Issue 3 March 1998
Put the two together and it's
close to NZD 1 billion. A
combination giving us a 10
percent market share.'
NZ FACTS AND FIGURES
Total F&A related GDP (in NZD bn) 13
Total agri exports
Dairy
Meat
Forestry
Wool
Horticulture
Major export markets
Asia
EEC
Australia
US and Canada
Others
Agri financial needs (over NZD 11 bn)
National Bank
BNZ
Westpac
ANZ
Trustbank
ASB
Wrightson's
AMP
Rabobank
RURAL GIANT
Wrightson's Farmers Finance
was purchased for NZD 100
million, a figure covering the
current NZD 600 million loan
book which can be split 30/60
percent into seasonal and term
loans respectively. Pre-tax
profit is forecast for NZD 13
million, giving a 27 percent
return on solvency. 'What
makes the acquisition so
complex is that we are buying
a department of what is
essentially a giant in rural New
Zealand - Wrightson's,'
continues Walters. 'As
Rabobank we will be co-
locating in the already
established Wrightson's offices,
effectively renting a portion of
every branch. From day one
we will piek up business and
run it as it was, over time
gradually converting all
systems to Sydney-based
Rabobank.'
ON THE FARM
To complete the picture,
What's NewS had the chance
to look from the other side of
the fence, literally, and
approached an existing
Rabobank cliënt for his
version of the recent
acquisition. Dairy farming
success story Michael Spaans
controls a large scale, 145
hectare dairy unit in the heart
of New Zealand's dairy
country, the Waikato. Spaans
painted a rosy picture of
business with Rabobank to
date, with particular interest in
the news of the Wrightson's
Farmers Finance acquisition.
Client and dairy farming success
story Michael Spaans
'The move hits right to the
very core of the farming
community in New Zealand,'
he says. 'But it's no secret that
the same community has
experienced hard times
recently. The beef industry for
one is not looking healthy,
with the wool industry not far
behind. Previously, Rabobank
enjoyed the status of having a
The team signing the Wrightson's settlement: left to right New
Zealand general manager Jaap Klep, chairman of Raho Wrightson
Finance Ben Walters, managing director Wrightson's Greg Kay and
Sir Ronald Trotter chairman Wrightson's.
RABO WRIGHTSON FINANCE BRANCHES
SERVICING THE WHOLE COUNTRY.
Whangerei
Auckland
Pukekohe
Hamilton -
Te Awamutu-—-
Te Kuiti-"'
New Plymouth Taumarunui
Wanganui-^_
Fellding
Thames
Te Puke
Rotorua
Taupo
Gisborne
Greymouth
Blenheim
Hastings
Waipukurau
Masterton
Wellington
Alexandra
Gore
Christchurch
Ashburton
Timaru
Oamaru
Dunedin
Invercargill
lot of top clients with strong
balance sheets - but that's not
the case for the middle asset
rural financing arm of
Wrightson's. Does the
acquisition mean more clients
simply for growth?'
PRICE MATRIX
In answer, Rabo Wrightson
chairman Walters is the first to
admit that the move does
increase our target market
substantially, 'yet it certainly
doesn't mean we are going
down market,' he says. 'On the
contrary. What we will prove,
and what the market has yet to
accept, is that there are
different pricing levels for
different credit risks; a strong
credit would attract a lower
margin - as is the case in a
typical Rabobank/PIBA
situation, whereas a middle
credit type ranking would pay
a higher margin. With this risk
return and reward pricing
matrix our existing clients will
not be affected. In fact, this is
the very reason behind our
joint marketing labels.
Rabobank, at least initially,
will be marketed to rural New
Zealand under two brand
names - Rabobank for the
traditional rural term loan
clients and Rabo Wrightson to
achieve the best from the
middle market lending and
deposit activities which
Wrightson's are so well known
for. In time, the two brands
will be merged - as will staff
and the rural branch network
in New Zealand.'
HOUSEHOLD NAME
For any kiwi, farmer or
otherwise, Wrightson's is trulyB
a household name. The newly
labeled Rabo Wrightson
Finance is a huge step towards
securing our name recognition,
an acceptance reaching right to
grass roots and providing the
perfect opportunity to kick
start Rabobank in the
relatively new Australasian
market. 'The deal,' continues
Walters, 'gives us the
opportunity to tap into the
20,000 existing Wrightson's
clients. The joint Rabo
Wrightson branding will allow
us to benefit from the strong
tradition and loyalty
Wrightson's has built up over
the past 150 years. It also
allows Wrightson's to benefit
by providing them with our
broader range of banking
products, ultimately making us
both more competitive.'
