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Land Bank is undergoing a transformation to become a stronger financial institution that functions on more solid ground. Themba Rikhotso, CEO of Land Bank, who was appointed earlier this year, has given his assurance that the institution will be much better capacitated to drive the development mandate of the agricultural sector and support commercial as well as emerging farmers.
Rikhotso has 23 years’ experience in the banking industry and worked in numerous African countries as well as Europe, Australia and New Zealand. In April this year, he took over the reins from Khensani Mukhari who was serving as acting CEO since May last year. Mukhari took up this temporary position after Ayanda Kanana resigned as CEO.
Land Bank’s current position
According to Rikhotso, the bank’s board of directors has done much to stabilise the institution after it went into some liquidity challenges in the first half of 2020 and defaulted in some of its debt liabilities with some of its lenders. However, he says the Land Bank is back on track in supporting the development of the agricultural sector and extending financial services to farmers. “Our liquidity position has been stabilised and the institution is highly solvent,” he said.
He added that close to 50% of what was outstanding at the time of default has been repaid to lenders. Another capital reduction was also made. This capital reduction will take the full debt repaid to all the lenders to approximately two-thirds of the total debt at the time of default. “We are still working out the liability solution with the lenders where we are trying to repackage the debt into new debt to allow us to get out of the current default position and start to operate normally.” In this case, approximately a third of the debt will remain.
According to Rikhotso, clients may approach the bank for their lending requirements. This includes commercial clients and new entrants into the agricultural sector, which includes emerging farmers that are part of the bank’s development mandate.
Improved turn-around time
Rikhotso gave his reassurance that Land Bank is in the process of restoring capacity in all its provincial offices in order to support its clients efficiently. “When the bank went into default in 2020 it created a lot of uncertainties both for our clients and internally with our staff. As a result we lost a lot of capacity, which affected turnaround time.
The bank is working hard to remove manual processes and introduce digital forms for accepting and assessing applications to fast-track turnaround times. Its goal is to respond to clients faster.
According to Rikhotso, the biggest hurdle at this stage is convincing some lenders to accept the liability solution. The institution is also consulting with National Treasury as a shareholder to provide assistance in reaching a liability solution agreement with all lenders. – Christal-Lize Muller, AgriOrbit