Loans business stimulant

Westpac's South Island head of business banking, John Brophy, says Westpac has money to lend....
Westpac's South Island head of business banking, John Brophy, says Westpac has money to lend. Photo by Peter McIntosh.
Westpac is hoping to grow its market share by helping southern businesses looking for money so they can help rebuild Christchurch after last year's earthquake and aftershocks.

The bank's newly-appointed South Island head of business banking, John Brophy, said some Otago and Southland businesses were gearing up to assist with rebuilding Christchurch, variously estimated to be worth between $5 billion and $8 billion.

To do so required investment in machinery and equipment and he hoped Westpac would be able to secure its share of that business.

In the year to the end of September, Mr Brophy said Westpac increased the amount it lent in New Zealand by $400 million while all bank lending over the same period fell $5.6 billion, a further sign, he said, that the bank was looking for new business.

It has also appointed 120 business bankers throughout its regional bank network to assist businesses through the recession, including 30 in the South Island.

But, businesses lacked confidence and Westpac chief executive George Frazis has launched Grow New Zealand, a series of national forums with business owners designed to find out why they are not investing.

At least one forum will be held in the South Island, and it was targeting businesses of all sizes.

Mr Brophy said a sign of that lack of confidence was the subdued demand for funds in the past six months, but he said that could also be due to companies consolidating their finances before expanding.

Otago businesses appear to have weathered the recession reasonably well, he said, in part because they were conservatively run and had low levels of debt.

Mr Brophy said business deals in Canterbury had recently fallen over due to a lack of confidence, but he believed those transactions would eventually be completed.

Westpac has not altered its lending criteria and has shifted more credit approval power out of head office and into regional centres, such as Christchurch.

"Our strategy is to get closer to our customers and understand them better."

The Grow New Zealand strategy, which aims to determine why businesses are not investing, was an extension of that investment in business bankers.

Mr Brophy believed the economy would improve later this year, evident by the number of transactions in the pipeline which were increasing in number each month.

His optimism was also based on improving terms of trade from the strength of exports, which he said would flow through to the rest of the economy.


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