Gordhan praises Land Bank turnaround

Johannesburg -  The Land Bank has made significant strides although challenges remain, Finance Minister Pravin Gordhan said in its annual report released on Thursday.

Gordhan said the bank's turnaround programme has been completed successfully, resulting in an improved performance.

"During this reporting period, the bank's market share has improved from 26% to about 27% of total farming debt as at December 31 2010. Although challenges remain, significant strides have been made.

"The bank can now focus its resources on fulfilling its development mandate as outlined in the Land and Agricultural Development Bank Act (2002), while maintaining financial sustainability," he said.

"South Africa should be able to celebrate the bank's centenary next year by recognising the achievements of a vibrant, healthy institution that is contributing to the development of our economy and democracy," he said.

Lower profit

The bank reported a net profit of R286.1m 2010/11, 25% lower than the net profit of R379.1m in the previous financial year.

It said this was mainly attributable to the decline in investment income from insurance operations. The group's banking operations contributed R200m (2010: R217.3m), excluding the inter-group dividend of R50m (2010: nil) and the insurance operations contribution of R86.8m (2010: R161.8m), to the group's bottom line for the year.

The most notable improvement in bottom line contributions came from the retail division, where overall profit increased by 186% from R93.6m in the prior year to R267.8m, mainly as a result of a release in impairments.