1. CORPORATE PLAN PRESENTATION TO THE PORTFOLIO COMMITTEE 04/09/2007

2. TURNAROUND STRATEGY  BANK HAD IDENTIFIED 6 ISSUES TO TURN AROUND ITS BUSINESS PEOPLE SYSTEMS AND PROCESSES RISK BRAND COST AND REVENUE CAPITAL

3. Current Posture

4. Bottom Line  Our Customers Commercial Farmers –(food security at national level) Emerging Farmers –(Equitable access and empowerment Issues) Small scale farmers –(food security at household level)

5. Expectations  Commercial Farmers Disaster Relief and Structural Support Role to play in the transformation of the sector Speedy Resolution of Empowerment Deals to include Land related matters

6. Expectations Conti….  Emerging Farmers Consideration of Land Bank and Products –And repayments (livestock etc.) Value Chain Participation Issues around debt development which has failed them so far Lack of Extension and Business Support Empowerment to allow for engagement with the commercial sector (AgriBEE) That the Land Bank should play its historic role

7. Expectations Conti….  Small scale farmers Rural Development Issues Food Security Jobs / Regular Income Skills and Support Development for them should not be just about tilling the soil Sustainability of Projects That the Bank should do for them what it did historically

8. Expectations Conti….  Government Land Bank Act (15 of 2002) Strauss Commission Sector Strategy Support Structures IRDS Alignment Processes SPV and AOSS Job Creation and Rural development

9. Development imperatives Vision We aspire to utilise the Bank’s financial resources towards the development of farmers and the rural economy Mission To support economic growth in South Africa through the development of farmers and rural economies by way of prudent investments to support the agricultural sector

10. Development Imperatives - Objectives The Bank must promote, facilitate and support: Ownership and access by previously disadvantaged groups of agricultural resources such as land is increased. Indicators  Number of emerging farmers supported to acquire land  Increase in land ownership by previously disadvantaged individuals (PDI’s)  Increased production by black and emerging farmers

11. Development Imperatives - Objectives The Bank must promote, facilitate and support: Agrarian reform and development programmes that are aimed at previously disadvantaged groups are implemented. Indicators  Number of programmes targeting PDI farmers  Number of farmers benefiting from such programmes  Number of farmers who show increased productivity and profitability  Number of support programmes dealing with rural poor and farm dwellers  Improved access by rural poor to services of Land Bank

12. Development Imperatives - Objectives The Bank must promote, facilitate and support: Financial services which are provided to the agricultural sector of rural South Africa in a manner that stimulates the establishment of enterprises Indicators:  Number of agricultural entrepreneurs supported  Number of enterprises established  Number of jobs created

13. Development Imperatives - Objectives The Bank must promote, facilitate and support: Commercial agriculture to ensure food security at national level is enhanced and maintained Indicators:  Number of commercial agricultural ventures supported  Value of production stimulated  Tonnage produced in various areas to support grain, diary and animals

14. Development Imperatives - Objectives The Bank must promote, facilitate and support: Creation of employment opportunities in the agricultural sector Indicators:  Number of permanent jobs created  Number of temporary or seasonal jobs created

15. The Response  That the Land Bank is by its nature a DFI  That the Strauss Commission Report further entrenches this perspective  That the Land Bank is part of the South African Agricultural Support Structure (OBP, PPECB, NAMC, ARC etc.)  That the institution has historically played a role in Agrarian reform and the expectations are still the same.

16. Response  That the nature of the sector has changed particularly around coops  That the Bank needs to find space in assisting the national agricultural program as articulated among other policy documents, the Sector Strategy  That the opportunities for the Bank lie in the proper understanding of the value chain internally initially and SADC and NEPAD secondarily.

17. Response  DFI network to include provincial, local and international  Rural Development Issues  Proper understanding of Policy and integration  Development of appropriate products  Alignment with Government objectives of economic empowerment, agriculture development and poverty alleviation

18. Product Orientation Model

19. Aligning with Government

20. Equitable Access and Rural Development Drive

21. desired posture of resource allocation and expected outcome

22. Corporate structure Land Bank LBIC Risk mitigation products For small enterprises Commercial 10% Capital Adequacy Development 20% Capital Adequacy Commodity Trading Funding

23. Expected Outcomes  All projects will assume a commercial posture (emerging farmers)  Branding of all Land Bank Products  Partnerships with other state organs and Coops (old and new)  Partnership with other DFI’s and Commercial Banks  Agree on development targets

24. Accountability Indicators  Employment creation and maintenance  Establishment of emerging farmers  Conclusion of BBBEE transactions  % growth in the development loan book over three years  Performance of the development loan book  Provision of advisory services  Geographic spread

25. Way Forward  Development of implementation plans for the new business model  Operational and financial strategies to be finalised by 30 November 2007  Outcome of the forensic audit and the review of DFI’s mandate to be taken into account

26. The Land and Agricultural Development Bank BUDGET PRESENTATION 4 SEPTEMBER 2007

27. Key Assumptions  Roll actual experience for the loan book  Development to grow by R300m in 2008, R1bn in 2009 and R2bn in 2010.  Detailed review of operating expenditure required to support the revenue stream still to be done

28. Income statement - Budget 2008 Budget 2007 R’m Actual 2007 R’m Budget 2008 R’m Interest Income1,693 1,7441,940 Interest expense(1,162)(1,279)(1,417) Net interest income531465523 Impairment of loans(48)(369)(124) Non interest income5726764 Operating expenses(562)(462)(537) Net profit / (Loss)(22)(99)(74)

29. Land Bank – Key Ratios Budget 2007 Actual 2007 Budget 2008 Net Interest income as a % of Interest Income 26.97%36.64%37.24% NIR as a % of Net Interest12.2%13.12%13.19% Cost to Income91.44%75.00%61.14% Total Loan BookR19.2bnR17.1bnR18.1bn

30. Thank You