Going Against Grain Into Rural Loans

Sydney Morning Herald

Tuesday August 29, 2006

Jessica Irvine

HOW would you feel if your business loan or mortgage fell into the hands of the embattled wheat exporter AWB?

Rural customers of Adelaide Bank found out yesterday that the bank had sold $160 million of their outstanding loans to an AWB finance subsidiary, Landmark, for an undisclosed amount.

As AWB awaits a likely damning report from the Cole inquiry that could threaten its monopoly on Australian wheat exports, the need to diversify its earnings is urgent.

Adelaide Bank's incoming chief executive, Jamie McPhee, was quick to reassure affected customers that there would be no change to their services.

"The sale will ensure our rural customers can continue business as usual - except that through Landmark they will have more services and products available to them," he said.

Mr McPhee said the bank did not have the scale or scope to continue extending its services to rural businesses and primary producers.

Landmark's general manager of financial services, Colin Taylor, said: "We understand this business well, we know what the customer wants and we are perfectly suited to provide [them] with competitive and tailored finance solutions."

AWB acquired Landmark from Westfarmers three years ago for $825 million. Landmark is now the second largest contributor to AWB earnings before interest and tax.

© 2006 Sydney Morning Herald

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