/ 17 August 2009

Tight market conditions add to Land Bank problems

The problems facing the Land Bank have been exacerbated by tight local market conditions, the bank said in its annual report on Monday.

The Land Bank’s profit for the year was R166,6-million, ”representing a significant increase on the R17,5-million recorded in the previous year”.

Profit from banking operations of R240,9-million was achieved following a loss of R19,8-billion in the previous financial year.

”This increase is mainly as a result of improved loan administration and cost reductions, resulting in impairment provision write-backs and improved expense controls.

”This led to a significant reduction in operating expenses,” the bank said.

Problems experienced by the Land Bank include four forensic investigations into irregularities at the bank — including the alleged transfer of millions from the bank to black economic empowerment companies.

The embattled state-owned Land Bank’s survival is further threatened by bad debt, with debt defaults mount among ”development farmers”. — Sapa