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BILB-Half year results
The Land and Agricultural Development Bank of South Africa
(JSE Code: BILB)
(“the Land Bank”)
Land and Agricultural Development Bank of South Africa: Unaudited Interim results for the
half year ended 30 September 2019
Preparation of this report
The Acting Chief Financial Officer, Ryan Engle CA (SA) was responsible for the preparation of the
unaudited interim results.
Basis of preparation
The condensed consolidated financial statements have been prepared, based on certain guidelines
contained in International Financial Reporting Standards (IFRS) and the interpretations issued by the
International Financial Reporting Interpretations Committee (IFRIC), by applying the accrual basis of
accounting, the going concern principle and using the historical cost basis except where specifically
indicated otherwise in the accounting policies. Accounting policies adopted and methods of computation
are consistent with those applied to the annual financial statements at 31 March 2019.
The preparation of interim financial statements requires management to make judgments, estimates
and assumptions that affect the application of accounting policies and reported amounts of assets and
liabilities, income and expenses. Actual results may differ from these estimates.
The key Group performance highlights are as follows:
FY2020H1 FY2019H1
Unaudited Unaudited
Statement of Profit and Loss and Other Comprehensive Income
Profit before Other Comprehensive Income (R’000) (184 683) 63 055
Net interest margin (%) 2.4% 2.8%
Statement of Financial Position
Total Assets (R’000) 53 564 030 48 499 273
Gross Loans and Advances (R’000) 43 259 904 44 055 545
Non-performing Loans (%) 9.9% 5.8%
Total Capital Adequacy Ratio (%) 15.9% 17.2%
Liquidity Coverage Ratio (%) 352.0% 394.4%
Net Stable Funding Ratio (%) 105.8% 110.7%
Six months review
The operating environment remains challenging given the slow economic growth and the effects of prior
years` droughts. The Group generated a loss before other comprehensive income of R184.7 million, a
decrease of more than 100% as compared to the prior year six-month operating period ending 30
September 2019. The decrease is attributable largely to muted loan book growth, roll – off of two large
assets at year end i.e. Profert and SilicCo and a higher impairment charge – up by R195 million to the
comparative period in the prior year.
Net interest income amounted to R467.4 million (2.4%), which is 0.4% lower than the comparative
period mainly due to a higher interest costs further compounded by the sluggish loan uptake as
evidenced by higher than anticipated cash balances.
Non-performing loans increased to 9.9% from 5.8% (FY2019: 8.8%) for the comparative period due to
the following:
• the shifting in seasons that continue to affect primary agriculture have resulted in late harvests
and repayment of loans
• clients are also still recovering from prior years` drought
• fluctuations in prices, armyworms and foot & mouth outbreaks
• “base-effect” in the calculation of the NPL ratio due to the disposal of Profert and the reduction
of the SiloCo exposure as at 31 March 2019, as well as a seasonal reduction in the loan book
adversely impacting the denominator in the calculation.
Funding initiatives have remained positive during FY2020H1 with continued Debt and Capital Market
support received during the period under review. As of FY2020H1, the Land Bank’s reliance on short-
term funding with a remaining time to maturity of less than 12 months, reduced to 48.8%, which is in
line with medium-term targets. Cash and liquidity levels remain healthy with access to cash of R6.5
billion and further liquidity through R2.15 billion committed and R0.5 billion uncommitted facilities.
The two Insurance subsidiaries, Land Bank Life Insurance and Land Bank Insurance, generated
satisfactory results.
Unaudited Results
The condensed interim financial results of the Land Bank for the six months ended 30 September 2019
are unaudited and have not been reviewed by an independent auditor.
Outlook
The financial success for the year ending 31 March 20120 hinges on the Land Bank’s ability to continue
delivering on its mandate, within the uncertain economic environment and unpredictable weather
conditions possibly impacting on the results.
Condensed consolidated Statement of Profit and Loss and Other Comprehensive Income for
the six months ended 30 September 2019
FY2020H1 FY2019H1
R’000 R’000 Var
Unaudited Unaudited %
Net interest Income 467 409 580 442 (19.5%)
Operating income from Banking Activities 194 623 339 640 (42.7%)
Net insurance (loss)/ income (64 163) (45 335) 41.5%
Total Operating Income 130 460 294 305 (55.7%)
Operating Expenses (305 135) (298 921) (2.1%)
Other Income 19 985 44 552 (55.1)%
Net Profit before Other Comprehensive Income (184 683) 17 002 (+100%)
Other Comprehensive Income (1 807) 46 054 (+100%)
Net Profit after Other Comprehensive Income (186 491) 63 055 (+100%)
Condensed consolidated Statement of Financial Position as at 30 September 2019
FY2020H1 FY2019
R’000 R’000 Var
Unaudited Audited %
Assets
Cash and cash equivalents 6 669 987 3 213 121 +100%
Investments 2 940 962 3 181 534 (7.6%)
Net Loans and Advances 42 406 256 44 465 456 (4.6%)
Short-term Insurance Assets 50 568 254 017 (80.1%)
Long-term Insurance Assets 8 824 8 287 6.5%
Other Assets 1 487 433 1 238 172 20.1%
Total Assets 53 564 030 52 360 587 2.3%
Equity and Liabilities
Equity 6 628 270 6 814 398 (2.7%)
Funding Liabilities 45 850 390 44 257 919 3.6%
Short-term Insurance Liabilities 67 770 329 860 (79.5%)
Long-term Insurance Liabilities 58 276 47 124 23.7%
Other liabilities 959 324 911 286 5.7%
Total Equity and Liabilities 53 564 030 52 360 587 2.3%
28 January 2020
Enquiries
Land and Agricultural Development Bank of South Africa
K Gugushe, Acting Chief Executive Officer
Ryan Engle, Acting Chief Financial Officer
Rebecca Phalatse, General Manager: Marketing and Communications – Tel: 012 686 0921
Date: 28-01-2020 05:12:00
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