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Integrated Results Presentation for the Year Ended 31 March 2017
THE LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Stock Code: LBK05 ISIN: ZAG000113572
Stock Code: LBK07 ISIN: ZAG000120007
Stock Code: LBK08 ISIN: ZAG000121005
Stock Code: LBK11 ISIN: ZAG000121955
Stock Code: LBK14 ISIN: ZAG000134354
Stock Code: LBK15 ISIN: ZAG000139890
Stock Code: LBK16 ISIN: ZAG000141144
Stock Code: LBK17 ISIN: ZAG000142787
Stock Code: LBK18 ISIN: ZAG000142795
Stock Code: LBK19 ISIN: ZAG000142977
Stock Code: LBK12 ISIN: ZAG000144627
(“the Land Bank”)
Land and Agricultural Development Bank of South Africa:
Integrated Results Presentation for the Year Ended 31 March 2017
The Land and Agricultural Development Bank of South Africa
(“Land Bank”) is delighted to release another strong set of
results for the financial year ending 31 March 2017. This was
achieved despite tough agricultural conditions, including the
worst drought in a century and a contracting economy,
characterised by volatile exchange rates and commodity prices
and credit ratings uncertainty.
The key performance highlights are as follows:
– The Group and Bank generated a profit of R372.2m (FY2016:
R181.9m) and R316.3m (FY2016: R94.0m) respectively;
– Net interest margin increased to 3.1% (FY2016: 3.0%);
– Cost to income ratio reduced to 51.4% (FY2016: 56.0%) on a
like-for-like basis;
– Non-performing loan ratio reduced to 7.1% (FY2016: 8.8%);
– Strong Capital Adequacy Ratio (CAR) position of 17.7%
(FY2016: 18.8%) compared to target of 15%;
– Strong Liquidity Coverage Ratio position of 85% (FY2016:
55%) compared to a target of 60%;
– Strong Net Stable Funding Ratio position of 86.7% (FY2016:
79%) compared to a target of 80%;
– Two major funding initiatives with the World Bank (R1.3bn)
and a consortium of international banks supported by MIGA
($300m) concluded during FY2017;
– Gross loan book that drives transformation comprises 11%
(R4.9-billion) of total Gross loan book. This represents a
growth of 99% compared to FY2016 (R4.9-billion in 2017 vs.
R2.5-billion in 2016);
– Total disbursements to clients amounting to R38.5-billion
(FY2016: R34.8-billion).
TP Nchocho, Chief Executive Officer:
Land Bank produced a solid set of results for the year ended 31
March 2017 This was achieved despite tough agricultural
conditions, including the worst drought in a century and a
contracting economy, characterised by volatile exchange rates
and commodity prices and credit ratings uncertainty.
A consolidation of the Bank’s earning’s base resulted in an 11%
growth of the gross loan book. This, together with more
appropriate risk-based pricing resulted in an increase in net
interest income by 10.8% to R1.3bn (FY2016: R1.1bn).
Notwithstanding the expected increase in interest cost as a
result of the uncertain external environment and the Bank
actively lengthening its funding profile, the net interest
margin increased from 3.0% to 3.1%.
Operating expenses increased marginally year-on-year, while the
cost-to-income ratio decreased from 56.0% to 51.4% during the
period under review on a like-for-like basis. The Bank has
delivered strong capital adequacy, liquidity coverage and net
stable funding positions, exceeding its targets for all three
ratios during the period under review. The sustainable and
strong balance sheet serves as a foundation to fund the future
growth of the Bank.
Investor confidence continued to improve, with Land Bank
managing to conclude two major funding transactions during the
year under review. The finalisation of R1.3bn agricultural
development facility with the World Bank and the $300m
commercial facility supported by MIGA were two noteworthy
achievements. This is especially significant, as the Bank does
not receive any direct financial subsidies from government and
has to raise money directly from the capital markets to drive
its mandate of facilitating economic transformation and social
inclusivity in the agricultural sector. The Bank does receive
guarantees from government from time-to-time, however,
approximately 10% of the liabilities of the Bank is guaranteed.
With the Bank’s sustainable financing strategy yielding positive
results, its support for transformative transactions has
increased. Specific highlights in this regard during the period
under review include:
– Increase of its Wholesale Financing Facility that supports
emerging farmers through intermediaries to R914 million
(FY2016: R477-million);
– Support to farmers impacted by the drought to the tune of
more than R100-million under its Drought Relief Programme,
a loan facility which is administered in conjunction with
the Industrial Development Corporation;
– Increased support to female farmers - 262 female farmers
with loans of R161-million now on its books;
– The launch and implementation of a Black Broker Training
Programme to train the first fully accredited Black Crop
Insurance Brokers in the country. A total of 18 brokers
were accredited who have begun marketing LBIC’s crop
insurance products.
In spite of the current socio-economic and political climate,
Moody’s Investor Services upheld the National Scale credit
rating of the Bank of Aa1.za during the period under review.
Land Bank also obtained an unqualified audit opinion for the
financial year in question, demonstrating its commitment to good
governance and sound banking principles.
The Land Bank FY2017 Annual Integrated Report and Results Launch
Presentation is available on the Land Bank’s website at
www.landbank.co.za.
Senior Officials of the Bank will embark on a deal specific debt
roadshow during the week starting 07 August 2017 to engage with
current and potential future investors. This roadshow
presentation is also available on our website.
03 August 2017
Comments by:
Land and Agricultural Development Bank of South Africa
TP Nchocho, Chief Executive Officer
Bennie van Rooy, Chief Financial Officer
Enquiries:
Tabby Tsengiwe – Tel: 012 686 0921
tatsengiwe@landbank.co.za
Debt Sponsor
The Standard Bank of South Africa Limited
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