Federated Farmers says in the last six months farmers' satisfaction with their banks has continued to erode and the number who feel under pressure from banks has risen.
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The latest Federated Farmers Banking Survey, conducted by Research First, showed while most farmers remain 'satisfied' or 'very satisfied' with their banks, the number who said they felt under pressure had lifted from 16 percent in May this year to 23 percent in the November survey.
The group's economics and commerce spokesperson, Andrew Hoggard, said this was disappointing but not at all surprising given what it had been hearing over the past several months of banks getting tougher and changing conditions as they seek to contain or even reduce their exposure to agriculture.
Mr Hoggard said examples of changed conditions putting farmers under pressure include new or increased margins; shifting from fixed to floating interest rates (or vice-versa); selling assets to repay debt; requiring principal as well as interest to be paid; and more information or security being required.
"All in all, the key results from the survey conducted by Research First reinforce the need for banks to treat their customers fairly and for farmers and banks to be proactive in their communications," he said.
The Reserve Bank's released its latest financial stability report yesterday, which looks at the health of the financial system. In the report the central bank reiterated its long-standing concerns about debt in the dairy industry, in particular a relatively small number of highly indebted farms which account for just under a third of total sector debt.
It said higher dairy prices had improved the finances of borrowers and banks had been stricter in lending, but it noted that some banks were trying to improve their profit margins by charging fees and other moves.