Landmark returns to ANZ

ANZ will buy the lending and deposit books of AWB's Landmark business for what is notionally book value, but only after AWB wrote off $62 million in loan losses and other restructuring costs.

The loan book acquired is around $2.4 billion, while the debenture book is around $300 million.

The bank was already the wholesale funder to most of the loan book and ANZ owned an earlier iteration of the customer list in the late 1980s and early 1990s when the bank owned the Dalgety rural services business. ANZ sold Dalgety in 1993 to Wesfarmers, while Wesfarmers sold what was then Landmark to AWB in 2001.

AWB has tried a few variants on funding and service models in agribusiness finance over the 2000s but has ultimately had to write off any goodwill attached to the business.

Landmark will remain an AWB business and ANZ will have the right to market banking products to Landmark customers.

This appears to be a static customer list at best. ANZ yesterday cited 100,000 customers of Landmark, the same as AWB talked of for the business five years ago.

Around 10,000 of these customers have loans, mainly seasonal finance.

AWB said it earned between $5 million and $10 million a year from the financing business. ANZ said it will allocate around $160 million in tier one capital to support the new assets and liabilities.

ANZ had an agreement to market rural finance through CRT (now part of RuralCo) a few years ago. That petered out and now National Australia Bank market loans and other banking products through CRT.