National Australia Bank abandons default penalties for farmers affected by drought | Agricultural products

* Largest Rural Lender Removes Default Interest Costs During Drought

* Drought Affects Australian Crops and Pastures

SYDNEY, July 24 (Reuters) – National Australia Bank The chief executive said that after a major investigation, the lender has put pressure on rural borrowers and that the weather is particularly dry.

The agricultural bank in Australia's hot and dusty has long been hard and, although it constitutes a small component of all the books, rural loans are among the most risky and most politically sensitive .

This has made it a target of criticism as the worst drought in living memory sweeps from eastern parts of Australia while a quasi-judicial royal commission investigates the misdeeds in the banking sector.

The NAB movement, which also includes the provision of discounted loans to farmers, is the latest of the banks that are striving to tighten their lending and reform their own practices before the recommendations expected for a stricter regulation of the sector.

"The Royal Commission and other investigations reveal that in some cases we have lost contact," said Andrew Thorburn, chief executive of NAB, during a speech Monday night in the rural town of Wagga Wagga.

The bank, which is Australia's largest rural lender, would no longer receive default interest if the drought delayed the repayment of borrowers and added that farmers could also access rates of interest. interest reduced, he added.

Wheat production, Australia's largest rural export, is expected to drop to its lowest level in eight years this year, due to near-record rainfall, while ranchers are killing cattle and sheep a thousand deaths.

Nufarm Ltd., a fertilizer and pesticide manufacturer, lowered its profit forecast on Monday as demand for a dry cut, while Graincorp Ltd, the country's largest bulk grain trader, issued a warning. on profits in May.

The revelations of the Royal Commission on the misconduct of the financial industry, which destroyed the confidence and stock prices of the major Australian banks, also highlighted the concerns of suburbanites in the circles rural.

The Commission learned in June that the NAB was accusing a couple of Queensland cattle ranchers of more than 2.6 million Australian dollars ($ 2 million) in arrears after the torrential rains followed by drought and a loan of 3.1 million Australian dollars. ($ 1 = $ 1.3550) (Report by Tom Westbrook, Additional Report by Colin Packham, edited by Stephen Coates)