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Elders bucks drought to post profit

Elders bucks drought to post profit

(4 February 2008 – Australia) Elders Rural Bank has posted an after tax profit of A$19.4 million for the six months to 31 December 2007, up from A$18.3 million for the same period last year. The bank’s loans under management sat at A$3.377 billion, up 16 percent on the previous year, while deposits grew 16 percent to hit A$3.395 billion.

The bank, which is a joint venture between Futuris Corporation Limited and Bendigo Bank, said the result was pleasing in light of ongoing adverse seasonal conditions and higher funding costs associated with the current state of credit markets.

Elders Rural chief executive, Paul Hutchinson, said the bank’s credit policy coupled with its knowledge of the rural sector were important elements in limiting the impact of drought conditions on its financial performance.

He said whilst generally higher commodity prices had offset lower yields for some Elders Rural customers, many continued to face challenging times after several years of drought.

Hutchinson said Elders Rural had no direct exposure to the sub-prime mortgage market, but that the bank had experienced an increased cost of funding as a consequence of the credit squeeze.

He said the bank remained in a strong financial position due to a large component of its funding comprising retail deposits.
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