Aug 16, 2012
Land Bank finances ‘healthier’, loan book doublesBack
Africa|PROJECT|The Land Bank|Africa|Agricultural Finance Bank|Bank|Corporate Banking|Dedicated Banking Division|Development Finance Institution|Manufacturing|Retail Commercial Banking|Lebogang Serithi|Phakamani Hadebe|Pravin Gordhan
© Reuse this
Speaking at the group’s financial results presentation, he noted that the agricultural finance bank’s performing loan book increased from R13.6-billion in 2011, to R21-billion in 2012. Nonperforming loans fell from R1.7-billion in 2011, to R1.4-billion this year.
The Land Bank’s business and corporate banking (BCB) division accounted for R17.3-billion of the performing loan book value, a jump from R10.6-billion the year before, while its nonperforming loans contributed R528-million during the year ended March 2012, down from R658-million in the corresponding period.
The retail commercial banking (RCB) division held R3.6-billion in performing loans, up from R2.9-billion in 2011, and a current R901-million in nonperforming loans, an improvement from R1-billion the year before.
Excluding a R137-million impairment that impacted on the group’s 2011 profit margins, the bank, which was celebrating its centennial this year, experienced 26.6% profit growth to R161.4-million, said CFO Lebogang Serithi.
The BCB division, which accounted for 73% of the banks assets, recorded an income increase to R164.9-million for the 2012 financial year, compared with the R10.1-million earned in the previous year, he commented.
The RCB division earned the company R31.1-million – a fall of 88.4% compared with the R267.8-million recorded in 2011.
The bank’s newest division – Retail Emerging Markets (REM) – reported a R3.7-million loss. REM was a dedicated banking division for emerging farmers with no other access to finance.
Finance Minister Pravin Gordhan commended the group on its performance, noting that the bank was making strides and a significant impact in helping to grow the economy to assist government in achieving its strategic economic aims.
The Land Bank, following a number of turbulent years, was now on solid operational footing and its finances were healthier after implementing a ‘fit for future’ project last year to refocus the group, said Hadebe.
The project targeted an internal process consolidation, which aim to deliver a predictable and enhanced customer interaction process, ensure a greater impact from development finance, create a sustainable delivery channel network and direct a growing business based on clear, achievable goals.
Further, as part of the company’s medium-term ‘2016 corporate landscape’ plan, the Land Bank planned to claim a 35% market share over the next five years, which Hadebe believed would enable greater savings for farmers owing to the bank’s below-average interest rates. The bank also aimed to push its development-funding portfolio to R5-billion, from its current R752.2-million, which comprised R101.7-million, R122.4-million and R528.1-million from REM, RCB and BCB respectively.
The Land Bank, which claimed to have created 13 335 jobs and maintained another 240 800 during the year, expected to create 110 000 new jobs and maintain another 250 000 over the next five years.
The group believed that for every R1-million disbursed to and spent in the agricultural sector, about 10 jobs were maintained or created in many different industries, such as manufacturing and distribution, as a result.
This estimation was based on the South African Social Accounting Matrix model, which was piloted in conjunction with the Development Bank of South Africa, in February 2011. The model estimates direct, indirect and induced impacts from agricultural banking activities.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Other Sugar News
Updated 34 minutes ago E-tolling Gauteng's highways has failed and the system falls short of its intentions, the Opposition to Urban Tolling Alliance (Outa) said on Tuesday. "This system is falling far short of its intentions and targets," Outa chairperson Wayne Duvenage told public...
Updated 47 minutes ago Fuel cell products provider Ballard Power Systems has appointed Randall MacEwen as president and CEO, effective October 6, replacing John Sheridan, who is retiring after serving as the company’s president and CEO since 2006. Sheridan would continue to serve as an...
Updated 1 hour 10 minutes ago Sub-Saharan Africa’s digital revolution was not set to get under way – it had already started, Ericsson VP for strategy, marketing and communication Tumi Sekhukhune told delegates at the Southern Africa Telecommunication Network and Application Conference...
Recent Research Reports
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...
Next ArticleAngola sugar manufacturing project under way