Harvesting growth: The industry will consolidate, even as it benefits from rising interest rates

Historically and persistently low interest rates extensively damaged interest income for the Agricultural Banks industry early in the five-year period to 2017 and constrained later growth. According to the latest available data from the Federal Deposit Insurance Corporation, both total agricultural bank lending and loans to the agricultural sector increased moderately from 2012 to 2016. However, low interest rates have caused interest income to remain volatile during the same period. Over the five years to 2022, industry revenue is forecast to rise. Anticipated increases in domestic interest rates largely explain the industry's improving interest income. However, the industry is expected to continue the consolidation trend that has persisted since at least 1999...purchase to read more.

Industry Statistics & Market Size
Revenue
$20bn
Annual Growth 12-17
0.4%
Forecast Growth 17-22
Profit
Employment
93,349
Businesses
8,624

Industry Threats & Opportunities

  • Low interest rates have caused interest income to remain volatile during the period
  • Industry wages are anticipated to outpace increases in employment
  • Rising aggregate household debt is expected to coincide with increasing demand for both agricultural and nonfarm loans
  • Industry Report - Starting a New Business Chapter

    The largest barriers to entry for the Agricultural Banks industry include regulatory restrictions, capital requirements and the geographic concentration of industry operators. Before forming a bank holding company through the acquisition of one or more banks in the United States, an operator must obtain the Federal Reserve's approval. Similarly, the Bank Merger Act requires that all proposals involving the merger of insured depository institutions be acted on by the Federal Reserve. Moreover, the Change in Bank Control Act requires persons seeking control of a US bank or bank holding company to obtain approval from the appropriate federal banking agency before completing the transaction...purchase to read more.

    Additional Insights for the Agricultural Banks Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Agricultural Banks Industry are

  • Easy access for clients
  • Access to inexpensive deposits
  • Superior financial management and debt management
  • IBISWorld analysts also discuss how external factors such as Prime rate and Agricultural price index in the Agricultural Banks industry impact industry performance..

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    What's in this report

    What is the Agricultural Banks Industry?

    Operators in this industry specialize in lending to the agricultural sector. More specifically, banks in this industry dedicate at least 14.4% of their total loans to agriculture.

    Industry Products
  • Interest income from farm production loans
  • Interest income from farmland loans
  • Interest income from nonfarm loans
  • Noninterest income
  • Industry Activities
  • Providing farmland loans
  • Providing farm production loans
  • Providing nonfarm personal and commercial loans
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Prime rate
  • Agricultural price index
  • Aggregate household debt
  • External competition

  • Current Performance
  • Lending and interest income
  • Profitability settles
  • Product trends
  • Chart: Revenue Growth

  • Industry Outlook
  • Regional focus
  • External competition rises
  • Table: Agricultural Banks Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Agricultural Banks Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Agriculture, Forestry, Fishing and Hunting
  • Consumers

  • Key Selling Industries
  • Commercial Leasing
  • Public Administration

  • Products & Services
  • Interest income from nonfarm loans
  • Noninterest income
  • Interest income from farm production loans
  • Interest income from farmland loans
  • Chart: Agricultural Banks Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Nonfarm businesses
  • Agricultural sector
  • Nonfarm consumers
  • Government agencies
  • Chart: Major Market Segmentation for the Agricultural Banks Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Wages
  • Interest expenses and loan loss provisions
  • Other noninterest expenses
  • Chart: Cost Structure Benchmarking – Sector vs Agricultural Banks

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Agricultural Banks Industry

  • Industry Globalization
    AgriBank, FNB Corporation,
  • Table: AgriBank - financial performance
  • Table: FNB Corporation - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Agricultural Banks Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Agricultural Banks Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Prime Rate (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Loan Loss Provisions
  • Funds set aside as allowances for bad debts, including debts where the customer defaults or where the terms of the loan need to be renegotiated.
  • Noninterest Income
  • Revenue derived from sources other than interest on loans. Noninterest income is largely composed of fees.
  • Return On Assets
  • A common measure of profitability that is equal to net income divided by total assets.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Agricultural Banks Industry Research Report contains up-to-date data and analysis, allowing you to identify the strengths and potential weaknesses of major companies in the industry. Build your credibility with clients and prospects by sharing insights into the current and emerging trends driving their industry. Our market research gives you the tools to win new business and keep existing clients.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Agricultural Banks:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Agricultural Banks market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Agricultural Banks, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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