Your ERB deposit and the Government Guarantee
Is Elders Rural Bank regulated?
Like all other Australian banks, Elders Rural Bank (ERB) is regulated by the Australian Prudential Regulation Authority (APRA). APRA currently supervises institutions holding approximately $3 trillion in assets for 21 million Australian depositors, policyholders and superannuation fund members.
ERB, like all Australian banks, is licensed as an Authorised Deposit taking Institution (ADI). All ADIs are prudentially regulated by APRA.
APRA sets and enforces stringent prudential standards designed to ensure that under all reasonable circumstances, ADIs can meet their obligations to depositors. The standards set by APRA on ADIs include establishing minimum requirements in relation to the following:
- liquid assets and liquidity management
- capital adequacy and capital management
- governance arrangements
- financial reporting
- internal and external audit arrangements
- risk management
ADIs must comply with APRA prudential standards at all times and are subject to ongoing supervisory oversight by APRA.
Is Elders Rural Bank covered by the Federal Government deposit guarantee?
On 12 October 2008 the Australian Federal Government announced that it will guarantee all term and at call deposit holders that have their deposits with an approved Authorised Deposit-taking Institution (ADI). This guarantee is for three years, at which point the Government will review its position.
As an Australian registered Bank, Elders Rural Bank (ERB) is an approved ADI. Therefore, all deposits with ERB are currently eligible and qualify for the Government guarantee.
Further details about the guarantee are progressively being released by the Government. Once the full details of the guarantee have been released and assessed, we will provide our customers with an update, where relevant.
To download our Deposit Guarantee Fact Sheet, click here.
For more information about the Government Guarantee, visit www.treasury.gov.au.
How safe is Elders Rural Bank?
ERB has delivered a consistently strong financial performance since it was established in June 2000. Since its inception, ERB has been providing specialised banking services and products to rural Australia and has maintained its conservative approach to financial management.
As a result, ERB's balance sheet has proven resilient during times of drought and economic volatility. ERB does not hold any subprime mortgages or any other 'toxic' and/or complex structured assets and has successfully avoided these assets.
Today, ERB is largely funded by retail deposits, maintains a strong asset base, and continues to adopt strict investment guidelines for its liquid investments.
How has Elders Rural Bank performed in the current market?
The combination of its deep knowledge of the rural sector and prudent financial management has served ERB well in the current market.
ERB's 2008 financial results demonstrate the strength of the bank with:
- record after tax profit of $41.1m (up 14% on 2007)
- total assets of $4.3bn (up from $3.7bn in 2007)
- loans under management of $3.6bn (up 12%)
- gross non-performing loans 0.66% (stable)
- total deposits of $3.7bn (up 15%)
- liquid assets of $654m (up from $514m in 2007).
ERB has delivered these strong results during a period which has been challenging for many financial institutions.
What is Elders Rural Bank's credit rating?
Elders Rural Bank has an investment grade credit rating issued by Standard & Poor's of BBB / A2.
Does ERB Have Any Exposure To The US Financial Markets?
No. Elders Rural Bank has no direct exposure to the US sub-prime mortgage market or to distressed overseas banking institutions.
All ERB investments are made in Australia, either as loans to primary producers or as liquid investments in Australian registered ADIs. Over 50% of ERB's liquid investments are with banks that have a single A rating or better from Standard & Poor's.
Does Elders Limited's financial performance affect Elders Rural Bank?
ERB is a separate company with its own Board, management, staff and operations.
Importantly, ERB is not reliant on Elders or Futuris (the parent company of Elders) for its funding and ERB does not hold investments in Elders.
Hence, whilst both ERB and Elders operate in rural and regional Australia and share the same brand, they are not the same company. ERB is a bank, regulated by APRA, established as a joint venture between Bendigo and Adelaide Bank Ltd and Futuris Limited.
Can my financial adviser contact Elders Rural Bank?
If you or your financial adviser or accountant would like to discuss any aspect of ERB's business, they are welcome to give us a call - our Treasurer, Rudy Boeff can be contacted by phone (08) 8425 4914 or by email markets@eldersruralbank.com.au.
How do I find out more?
To find out more about Elders Rural Bank, ask at your local Elders branch, visit www.eldersruralbank.com.au or call our Customer Service Centre on 1300 660 115.
If your financial adviser or accountant would like to discuss any aspect of ERB's business, they are welcome to call Elders Rural Bank Treasury directly on 1800 644 824.
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