Land Bank makes R1.2bn on corporate bonds

The state-owned Land Bank raised R1.2 billion in the corporate bonds market, it says.

"The floating notes were of a three year period and were over-subscribed," it said in a statement on Friday.

"After years of underperformance the Land Bank is now poised to become a strategic and sustainable development finance institution."

This was the culmination of a "painstaking process" of stabilising the bank after years of uncertainty.

"Only three years ago, the Land Bank was a strife-stricken institution where corporate governance challenges, corruption and mismanagement were the order of the day."

Since 2008, the bank had seen a return to normality and stability.

"A new management team of skilled managers has been put in place."

The Land Bank said over 60 critical positions had been filled.

"Most remarkably, the Bank has achieved an unqualified audit report and profitability for the second year running."

Clients and investors alike were returning to the bank "in numbers" and the quality and growth of the loan book had seen "remarkable" improvement.

"The bank is now able to raise funding in the market with ease as the appetite for the Land Bank paper has increased and investors are willing to extend the loan maturities."

The proceeds of the latest bond issue would be used for loans to various players in the agricultural and rural development sectors.

The bank intended play a more prominent role in developing emerging farmers.