1. Land Bank 2006/7 Annual Report Presentation to the Portfolio Committee 7 November 2007

2. 2 PRESENTATION OUTLINE  Introduction – Mr Lungile Mazwai: Chairperson  Strategic Overview – Dr Phil Mohlahlane: Acting CEO  Financial Review – Mr. Xolile Ncame: CFO  Treasury Review – Mr Makgale Gwangwa: Treasurer  Questions and Answers

3. 3 STRATEGIC OVERVIEW Dr. Phil Mohlahlane Acting Chief Executive Officer

4. 4 Vision and Mission Vision: We aspire to utilise the Bank’s financial resources towards the development of farmers and the rural economy. Mission: Land Bank supports economic growth in South Africa through the development of farmers and rural economies by way of prudent investments that support the agricultural sector.

5. 5 The agricultural sector Negative contribution of 13% by agriculture Fluctuation of the Rand has had a severe impact on the agricultural exports market Net farm income has declined by 48% over a three tear period ended 30 June 2007 Maize industry experienced set backs in the past three years Low price on 2005 Reduced maize planting in 2006 Drought in 2007

6. 6 Operationalising – New Business Model  The Bank plans to disburse R300 million to developing farmers in the 2007/2008 financial year, R1 billion and R2 billion in the 2008/2009 and 2009/2010 financial years respectively.  The rehabilitation of struggling projects – there are a number of projects in the Bank’s book that lack support, have poor funding structures and have no access to markets;  The existing entrepreneurial projects in the agriculture value chain, in particular those that need funding to create more jobs and for BEE;  New projects as identified by ASGISA;  Bio fuels.

7. 7 Operationalising – New Business Model  Special emphasis to be placed on growing the Bank’s business  concentrating on economic activities that will launch both subsistence and emerging farmers into commercial streams.  Achieved through the utilization of Co-ops, Provincial DFI’s and other support structures.

8. 8 Empowering developing farmers  Over the past five years, the Bank has given direct assistance to black businesses.  This can be translated into an impact on a number of households within rural and farming communities as well as individual black farmers.  At R793 million with 15 000 accounts, retail loans alone are estimated to have benefited 9 600 individual farmers.

9. 9 Joint Initiative on Priority Skills Acquisition (JIPSA) The demographic breakdown of bursaries is as follows: Eastern Cape -5 KwaZulu-Natal-7 Free State -4 Gauteng - 22 Limpopo - 6 North West -4 In the year 2006, R3.2 million was spent on bursaries.

10. Financial review Xolile Ncame Chief Financial Officer

11. 11 Income Statement - Company 2007 % Change 2006 % Change 2005 R’m Net Interest Income4651241725557 Non Interest Income105642884301 Operating expenses(462)5(439)6(416) Net non-operating income162100+(71)100+(12) Bad Debt Provision normal (172) (198) 46 (320) - 50 (637) - Bad Debt Provision Land Claim 100 Net loss / profit(100)(125)(207)

12. 12 Loan book and Provisioning 2007200620052004 Total Gross loan bookR17.3bnR16.3bnR18.3bnR16.2bn Non-Performing Loan (NPL)R2.6bnR2.2bnR1.7bnR3bn NPL as a % of gross loan book15%13.5%9.3%18.5% Loan provisionR1.7bnR1.4bnR1.2bn Provision as a % of total loan book9.8%8.6%6.6%7.4%

13. 13 Equity to Total Assets Ratio 20072006200520042003 Equity to total assets9.7%8.7%7.3%11.8%14.5% Equity to total assets adjusted for National Treasury guarantee R1.5bn letter of undertaking Capital injection R700m (20%) 18.4%16.4%

14. 14 Audit Qualification  Land for Development Product may not be in terms of the Land Bank Act and this uncertainty has led the auditors to raise a qualification  Bank is in the process of selling this book

15. Treasury Review Makgale Gwanga Treasurer

16. 16 Bank Borrowings 2007200620052004 Long Term3 4153 7313 8141 889 Medium Term4 1462 8844 8012 814 Short Term8 57010 6439 86410 732 TOTAL16 13117 25818 47915 435

17. 17 Funding Portfolio Funding (Million) 200720062005 FIXED RATE Long Term1 7543 7313 814 Medium Term739-- Short Term9 9967 7209 529 3 48911 45113 343 FLOATING RATE Long Term1 661-- Medium Term3 4072 8844 801 Short Term7 5742 923335 12 6425 8075 136 Total Funding Portfolio16 13117 25818 479

18. 18 Funding Program  Board approved R10bn DMTN program  R2bn long term bond to be issued  Arrangers and lead managers have been appointed  Road Shows will be conducted with investors

19. THANK YOU