1. ANNUAL REPORT PRESENTATION
DATE: 8 September 2015
LAND BANK
ANNUAL REPORT PRESENTATION
INSPIRING GROWTH AND INCLUSIVITY: in Agriculture
SCOF PRESENTATION

2. 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

3. EXECUTIVE LEADERSHIP OF THE BANK Mr Bennie van Rooy Mr TP Nchocho
Chief Financial Officer
Mr TP Nchocho
Chief Executive Officer
Mr Mpumi Tyikwe
MD: Land Bank
Insurance Company
Mr Willie Jacobs
EM: Corporate Banking
Ms Kone Gugushe
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

4. 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

5. 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

6. Substantially Achieved
OPERATIONAL PERFORMANCE:
HIGHLIGHTS
(Page )
Key Performance Area
Status
Guarantee conditions (Maintaining minimum 20% Capital Adequacy)
Achieved
Portfolio Committee undertakings (Resuscitation of Distressed Farms)
Development
Implement development as core to business (Developmental disbursements)
Partially Achieved
Financial sustainability and affordable funding
Growth in the loan book (gross)
Cost to income ratio
Diversification of income streams (year-on-year increase)
Reduce non-performing loans (NPLs)
Liquidity
Financial plan: Net profit
Financial plan: Gross interest margin
Financial plan: Net interest margin
Substantially Achieved
Human Capital
Ensure the provision of key talent in support of sustainable growth
Develop internal organisational capacity in support of sustainability
Model organisational design on best practise
Entrench leading employee relations practise
Develop an integrated total rewards model
Achieve company employment equity/transformation targets in respect of ACI targets

7. Substantially Achieved
OPERATIONAL PERFORMANCE:
HIGHLIGHTS (…continues)
(Page )
Key Performance Area
Status
Information Technology
Enable the business through the implementation of appropriate technologies
Achieved
Research and innovation
Scanning of the environment for Land Bank business
Advice and advocacy
Research publication
Market share (2016 Corporate Landscape)
Partially Achieved
Service delivery
Retail credit turnaround time
AFC network optimisation
Enhanced product offering
Not Achieved
Ensure partnerships and stakeholder engagement
Stakeholder platforms and channels
Formalise service delivery partnerships
Substantially Achieved
Good governance, risk management and compliance
Integrate enterprise wide risk management
Ensure statutory and regulatory compliance
Identify and quantify relevant strategic and operational risks

8. ENVIRONMENTAL & SOCIAL SUSTAINABILITY
(Page )
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

9. FINANCIAL PERFORMANCE
(Page 82)
FY2015
FY2014
Var %
Statement of Financial Position
Performing loan book (gross)
R 36.4bn
R 33.0bn
10.4%
Non performing loans
R 1.4bn
R 1.1bn
16.7%
NPL ratio
3.7%
3.2%
15.6%
Capital / gearing adequacy ratio
37.1%
25.9%
43.2%
Capital & reserves
R 6.7bn
R 5.8bn
15.5%
Guarantees
R 5.5bn
R 2.0bn
+100%
Liquidity ratio
8.2% -
Net cash position
R 1.61bn
R 1.47bn
9.5%
Funding: Fixed Rate Funding
2.2% 0%
Funding: Maturities < 12 months
69%
75%
(8.0%)

10. FINANCIAL PERFORMANCE
(Page 83) (…continues)
FY2015
R’m
FY2014
Var %
Net interest income
1,059.9
931.9
13.7%
Net impairment charges
(166.7)
(140.9)
(18.3%)
Non interest (expense)/ income
(130.5)
(53.5)
(+100%)
Operating income from banking activities
762.8
737.4
3.4%
Operating expenses
510.5
525.8
(2.9%)
Total comprehensive income for the year (excluding Insurance dividend)
220.5
260.7
(15.4%)
Well-managed borrowing costs
Two B&CB clients went into distress
Administration fees on service level agreements
Cost containment

11. 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%

12. FINANCIAL PERFORMANCE
(Page 42) (…continues)
CAPITAL ADEQUACY (GEARING RATIO)
Additional R4bn guarantee from Government
Total guarantees from Government R5.5bn

13. Development Impact of the Land Bank funding
DEVELOPMENT PERFORMANCE
(Page )
Development Impact of the Land Bank funding
Indicator
Value
Total Land Bank funding disbursed (R million)
36 471
Impact on GDP (R million)
40 941
Household Income (R million)
26 214
Low Income Households
4 802
Medium Income Households
5 329
High Income Households
16 083
Nature of Jobs (Numbers)
New Jobs
23 975
Maintenance of Jobs

14. NEW STRATEGY FRAMEWORK: TARGETED OFFERINGS TO PRIORITY SEGMENTS & AGRI COMMODITIES
Target end customers
Approach taken
Sector Growth Financing
Accelerate high-potential regions and crops 1
Emerging commercial farmers
New farm development
Expansion projects
Strategic growth acquisitions
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
Supply chain development
Focus on agro-processing 2
Agro-processors
Enterprises that require capital expansion
Commercial farmers moving up the value chain
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
Sector Productivity & Intensification
Support next-generation farming 3
Established commercial farmers
Commercial farmers with potential for expansion or yield improvement
Focus on capital projects with high potential to expand output or increase yields
Provide
Tailored production finance
Specialised asset finance
Agri - Innovation
Spur Agri - Innovation 4
Ag innovation start-ups
Enterprises with evolutionary agri. technology or products
Invest in the commercialization of high potential Agri. innovation companies either directly or via VC funds

15. 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

16. 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