The Land Bank has posted a R172-million loss from its continuing operations for the six months ended on 30 September as its interest income continued to decline while provision for bad debts grew.
The state-owned lender, which finances approximately 27% of agricultural debt in SA and is the only source of funding for most of the emerging farmers, published a short presentation of its unaudited interim results for the first half of its 2020 financial year on Monday evening.
The presentation showed that the Land Bank's net interest income, which is income generated from its lending activities, stood at R223-million. There are no comparable reports or presentations of the previous year's interim results, as the bank normally only publishes full-year results.
But the Land Bank wrote in the presentation that its net interest income continues to decline. Its gross loan book is also declining, while it continues to face a relatively higher cost of funding due to its credit rating downgrades last year and defaults reported in 2020.
The bank faced liquidity problems for most of 2020 but in the results presentation it wrote that its cash levels have improved, mainly due to a R3-billion cash injection from National Treasury, as well as collections from customers.
But it also made lower disbursements. This saw the bank's gross loans and advances decrease to R41.2-billion from the R45.3-billion reported at 31 March 2020. The decline in the gross loan book was also partly a result of repayments from customers.
After all this, the bank had a cash balance of R7.3-billion as at 30 September, which it said would be used for future loan disbursements or the repayment of funding.