Land Bank helps cre­ate 15 000 jobs in agri­cul­tural sec­tor

The Star Early Edition - - COMPANIES - Sandile Mchunu

THE LAND and Agri­cul­tural De­vel­op­ment Bank of South Africa cre­ated 15 000 jobs in the agri­cul­tural sec­tor in the year to March by pro­vid­ing fi­nance for emerg­ing farm­ers, the state-owned lender said yes­ter­day.

The bank, also re­ported a 10 per­cent rise in net in­ter­est in­come to R1.3 bil­lion for the year ended in March, up from R1.1bn for the same pe­riod last year, while net profit rose 13per­cent to R347m.

The strong per­for­mance came against sub­dued con­di­tions in the agri­cul­tural in­dus­try, which in­cluded the worst drought in a cen­tury and a con­tract­ing econ­omy marred by volatile ex­change rates af­fect­ing com­mod­ity prices.

Land Bank chief ex­ec­u­tive Petrus Ncho­cho said it made avail­able R2bn for the year to end March through its de­vel­op­men­tal sec­tor, which has black emerg­ing farm­ers as its main ben­e­fi­cia­ries.

“We are happy 15 000 jobs in the agri­cul­tural sec­tor were cre­ated through our in­volve­ment. How­ever, over­all we had set aside an R4.8bn loan dis­burse­ment for the pe­riod and R2bn went to emerg­ing farm­ers,” Ncho­cho said.

Ncho­cho said the bank grew its gross loan book by 11 per­cent to R43.3bn, up from R39bn a year be­fore, while man­ag­ing to re­duce over­all costs and im­prov­ing its cap­i­tal, liq­uid­ity and fund­ing po­si­tions.

The bank achieved some no­table high­lights dur­ing the year, in­clud­ing sup­port­ing farm­ers im­pacted by the drought with at least R100m un­der its Drought Re­lief Pro­gramme, which is ad­min­is­tered in con­junc­tion with the In­dus­trial De­vel­op­ment Cor­po­ra­tion.

The bank also in­creased sup­port to fe­male farm­ers, with 262 loans of R161m now on its books.

This year the bank con­cluded two ma­jor fund­ing trans­ac­tions – a R1.3bn agri­cul­tural de­vel­op­ment fa­cil­ity with the World Bank and the $300m (R4bn) com­mer­cial fa­cil­ity sup­ported by Mul­ti­lat­eral In­vest­ment Guar­an­tee Agency.

The bank also ob­tained an un­qual­i­fied au­dit opin­ion for the fi­nan­cial year in ques­tion, demon­strat­ing its on­go­ing com­mit­ment to good gov­er­nance and sound bank­ing prin­ci­ples.

Ncho­cho said the fund­ing rep­re­sented a vote of con­fi­dence in the work be­ing un­der­taken to grow the agri­cul­tural sec­tor.

He added that the money came at the right time with the sec­tor buck­ling un­der drought, and said the sec­tor con­tracted 6 per­cent in 2015 and 7 per­cent last year.

“How­ever, the sec­tor is re­cov­er­ing with the rain in the sec­ond and third quar­ter last year. Crop farm­ers in­creased the area planted by 38 per­cent as a re­sult,” Ncho­cho said.

PHOTO: SUP­PLIED

Chief ex­ec­u­tive Petrus Ncho­cho says the Land Bank made R2bn avail­able for the year to March through its de­vel­o­men­tal sec­tor.

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