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This annual report presentation highlights the Land Bank's executive leadership, governance, operational performance, environmental and social sustainability, and financial and development impact. The report also outlines the bank's new strategy framework and opportunities and challenges for the future.
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DATE: 8 September 2015 LAND BANK ANNUAL REPORT PRESENTATION INSPIRING GROWTH AND INCLUSIVITY: in Agriculture SCOF PRESENTATION
TABLE OF CONTENTS EXECUTIVE LEADERSHIP OF THE BANK INTRODUCTION & CONTEXT GOVERNANCE: AUDIT REPORT OPERATIONAL PERFORMANCE: HIGHLIGHTS ENVIRONMENTAL & SOCIAL SUSTAINABILITY FINANCIAL PERFORMANCE DEVELOPMENT IMPACT PERFORMANCE GOING FORWARD: NEW STRATEGY FRAMEWORK IMPROVING COORDINATION & COOPERATION OPPORTUNITIES & CHALLENGES
EXECUTIVE LEADERSHIP OF THE BANK Mr Bennie van Rooy Chief Financial Officer Mr TP Nchocho Chief Executive Officer Mr Mpumi Tyikwe MD: Land Bank Insurance Company Mr Willie Jacobs EM: Corporate Banking Ms KoneGugushe EM: Risk Management Ms Mpule Dlamini EM: Human Resources Ms Loyiso Ndlovu EM: Strategy, Comm’s& Policy Ms Lindiwe Mdlalose EM: Portfolio Management Services Mr Gary Conway EM: Organisation Integration & Tech Mr Jerome Mthembu EM: Legal Services Mr Sydney Soundy EM: Commercial Development Banking
INTRODUCTION & CONTEXT (Page 6,8 & 12) • The importance of the Agriculture sector in igniting economic growth and ensuring food security • Recognition that Land Bank’s operational effectiveness can be greatly enhanced through collaborations with other DFI’s & Sector Departments • At a governance and leadership level, the appointment during the year of new Chairperson of the Board (Mr. MA Moloto) and Chief Executive Officer (Mr. TP Nchocho) • Economically, the agri sector faced difficult conditions, being the generally slow economy and the impact of drought • Despite the difficult conditions, the agri sector remains fairly resilient, and the Bank itself performed well under the circumstances
GOVERNANCE: AUDIT REPORT (Page 14, 16 & 17) • The Bank’s Audit Committee is duly constituted per the PFMA and functions independently as per its Charter • The Internal Audit function of the Bank is fully capacitated with appropriately qualified and experienced staff • The Audit Committee has expressed satisfaction regarding the governance and control environment of the Bank • Therefore, an Unqualified Audit Report for the year 2014/15 • No material findings were identified on the usefulness and reliability of performance information • Financial statements that were free from material misstatements
OPERATIONAL PERFORMANCE: HIGHLIGHTS (Page 20 - 27)
OPERATIONAL PERFORMANCE: HIGHLIGHTS (…continues) (Page 20 - 27)
ENVIRONMENTAL & SOCIAL SUSTAINABILITY (Page 32 - 36) • The Bank prioritises the protection of the environment and society to ensure shared value creation with the South African community at large • The Bank pledges to be a good corporate citizen and its desire to lead by example in pursuing sustainable development • The Bank is committed to ensuring that all activities it finances are implemented in a sustainable manner to protect the environment and society and promote sustainable development • As a good corporate citizen, the Bank endeavours to always invest in social responsibility and shared value creation
FINANCIAL PERFORMANCE (Page 82)
FINANCIAL PERFORMANCE (Page 83) (…continues) • Well-managed borrowing costs • Two B&CB clients went into distress • Administration fees on service level agreements • Cost containment
FINANCIAL PERFORMANCE (Page 40 & 41) (…continues) LIQUIDITY & CASH MANAGEMENT EQUITY AND RESERVES (Excl. Government Guarantees) • Liquidity ratio of 8.2% (FY2014: 8.2%) against target of 7.5%
FINANCIAL PERFORMANCE (Page 42) (…continues) CAPITAL ADEQUACY (GEARING RATIO) • Additional R4bn guarantee from Government • Total guarantees from Government R5.5bn
DEVELOPMENT PERFORMANCE (Page 46 - 48) Development Impact of the Land Bank funding
NEW STRATEGY FRAMEWORK: TARGETED OFFERINGS TO PRIORITY SEGMENTS & AGRI COMMODITIES • Sector Growth Financing • Accelerate high-potential regions and crops • 1 • Supply chain development • Focus on agro-processing • 2 • 3 • Sector Productivity & Intensification • Support next-generation farming • 4 • Agri - Innovation • Spur Agri - Innovation • Target end customers Emerging commercial farmers • New farm development • Expansion projects • Strategic growth acquisitions Agro-processors • Enterprises that require capital expansion • Commercial farmers moving up the value chain Established commercial farmers • Commercial farmers with potential for expansion or yield improvement Ag innovation start-ups • Enterprises with evolutionary agri. technology or products • Approach taken • 4 high potential provinces and 5 value chains prioritised • Convene stakeholders to originate opportunities • Pursue 4 financing gaps: land acquisition, farm expansion, insurance and production loans • 11 high potential commodities selected • Strong syndication with other institutions e.g., IDC, DBSA • Pursue 3 financing gaps: greenfield project financing, contract farming, and value chain financing • Focus on capital projects with high potential to expand output or increase yields • Provide • Tailored production finance • Specialised asset finance • Invest in the commercialization of high potential Agri. innovation companies either directly or via VC funds
IMPROVING COORDINATION & COOPERATION Alignment of Strategies Programmes: Priority Alignments Agri Commodities: Priority Focus Areas Land Reform-specific Initiatives: Complementarities Projects Development & Financing: Delivery Models Policy Dialogues Review of Existing MoU’s / Funds: Enhance and/or Reframing
OPPORTUNITIES & CHALLENGES • Expansion of agricultural exports, especially into Sub-Sahara • Room for rural economy development & job creation, but requires a viable land access dispensation • Continued focus on improving sector productivity and yields of the established commercial farming sector • Smallholder farmers development support needs to be underpinned by strong institutions, preferably with regional focus • Special initiatives required for investments in infrastructure to enable agriculture growth • On-going policy clarifications, e.g. Land rights; Water rights