National Australia Bank (NAB) on Tuesday reported the first increase in bad loans in almost six years largely due to its exposure to New Zealand's dairy industry, highlighting the risks to banks owed around US$25 billion by cash-strapped farmers.
Australia's biggest lender said it does not expect losses due to these impaired loans, which analysts said have yet to ring any alarm bells, but they add to the pressures for a banking sector that is already battling slowing revenue growth and stricter capital rules.
Global dairy prices have slumped 55% since early 2014, adding pressure on New Zealand farmers, the majority of whom are already operating below break-even.
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Australia's biggest lender said it does not expect losses due to these impaired loans, which analysts said have yet to ring any alarm bells, but they add to the pressures for a banking sector that is already battling slowing revenue growth and stricter capital rules.
Global dairy prices have slumped 55% since early 2014, adding pressure on New Zealand farmers, the majority of whom are already operating below break-even.
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