Rabobank New Zealand has warned of higher provisions for bad dairy loans in 2016 after reporting a flat profit for 2015 and strong lending growth to customers requiring bank support.Rabobank reported a net profit for calendar 2015 of NZ$104 million, down marginally from NZ$105.5 million in 2014. This was due to a fall in loan impairment releases to NZ$5.6 million down from NZ$19 million the previous year, almost offsetting an improvement in operating income to NZ$244.5 million from NZ$230.3 million.Rabobank acting chief executive Crawford Taylor said loan provision recoveries had helped reduce loan provisioning to a five-year low, but low dairy payouts would increase bad loan provisions in the current year."Given the challenging conditions being experienced in the dairy sector, provisions are likely to rise this year after the low levels of the prior year," Taylor said."At this time, there is no specific provisioning expected, but there has been an increase in collective provisioning to allow for additional risk in this sector," he said.Rabobank's lending rose NZ$643 million to NZ$9.43 billion during the year, almost double the lending growth of the previous year, but in line with market growth of lending to farmers as working capital needs increased in line with operating losses."Our portfolio growth over the past several years has mirrored that of the overall market and, as a result, our market share has remained relatively stable (at 15.3 per cent) during this period," Taylor said."This illustrates our consistent approach to supporting our clients," he said."While the current dairy downturn is very challenging, the bank's view remains that the outlook for this sector in the medium to longer term is positive."Rabobank said would continue to retain its profits to bolster its tier one capital ratio, which stood at 13.72 per cent, down slightly from 13.94 per cent at the end of 2014.