Elders Inked New Partnership Terms With Rural Bank

  • Nov 29, 2018 AEDT
  • Team Kalkine
Elders Inked New Partnership Terms With Rural Bank

Elders’ shares continue to move down after the Rural Bank acquired Elders’ 95 financial services staff under the new nine-year distribution agreement.

On Wednesday, agribusiness company Elders Limited (ASX: ELD) announced that the company will enter into a new nine-year exclusive distribution arrangement with Rural Bank from 4 March 2019.

Rural Bank was a 50-50 joint venture between Elders and Bendigo Bank when it got authorized to function as banking organization in the year 2000.  But later in 2008, Elders sold its ownership in Rural Bank to Bendigo Bank and entered into a distribution partnership under which Elders had the right to distribute deposit and loan products to rural and regional customers on behalf of Rural Bank.

So far, this distribution agreement has been on track but now it is reported to be replaced by the introduction of new arrangement. Rural Bank will be acquiring, as per the new agreement, approximately 95 Agri-finance relationship managers as well as support staff of Elders. Under this arrangement, these employees will manage deposits and provide transactional services to the customers of Rural Bank but will continue to operate from Elder’s branch. The arrangement translates that Elders’ 95 employees will no longer be employed by Elders and will come into a direct employment of Rural Bank with effect from 4 March 2019.

In return Rural Bank will pay certain fees to Elders Bank at the time of termination or expiry of the contract. Elders told that both the parties have termination for convenience rights that may be exercised at the end of 3rd and 6th year of the term.

Ahead of establishing new partnership with Rural Bank, Elders expects that its annualised earnings before interest and tax driven by this relationship will be within the range of 5% and 10%, higher than earnings from its relationship with Rural Bank in Fiscal 2018.

On customers front, there would be almost no change in the picture. That means if the transitions go smooth, the customers will be served by the similar locally based, Agri specialist relationship managers as before the change in relations.

Elders CEO and Managing Director Mark Allison ensured that this new arrangement between Rural Bank and Elders is in the best interest of employees, customers and other stakeholders.

Mr. Allison further added that with this new arrangement Elders can more focus on its specialist financial services under its Eight Point Plan meanwhile, providing a secured revenue stream to its shareholders.

In today’s trading session, Elders’ shares plunged by 1.065% or $0.075 to last trade at $6.965 as on 29 November 2018. Moreover, the stock last traded at a price to earnings ratio of 11.350 x with market capitalization of $821.4 million. Over the past one year, Elders’ share price has gone up by 6.51% but in the last 5-day trade it has dipped by 3.16%.


This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.



All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.


There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK