land bank back in the black

THE troubled Land Bank has posted a clean bill of health - but warned that those responsible for plundering it will face the full might of the law.

Presenting its annual results in Johannesburg yesterday, the bank announced a profit of R241million and R166million at the Land Bank and group levels respectively.

Finance Minister Pravin Gordhan, under whose department the bank now operates after it bailed it out from near-ruin last year, warned that those guilty of financial crimes at the bank would be brought to book.

Treasury took over the bank following a forensic probe that revealed financial mismanagement and dodgy loans made to black economic empowerment and commercial ventures.

Treasury has since given the Land Bank R3,5billion in guarantees.

Gordhan said both the Hawks and the police were investigating allegations of fraud, corruption and financial mismanagement - with four forensic probes under way.

"Financial crimes are complex and take time to be unravelled ... I am sure our criminal justice system will see that the culprits are dealt with," said Gordhan, adding that investigations were at a "sensitive" stage.

The bank said group profits were up R166,6million from R17,5million the previous year, and posted profits from its banking operations of R241million, compared to a loss of R20million last year.

It also posted an improvement on its cost-to-income ratio from 77percent the previous year to 55percent in 2008/9.

Its net cash position was also significantly better at R3,5billion, up from just R800million the previous year.

Chief executive Phakamani Hadebe said the improved performance was a result of a turnaround strategy implemented since July last year.

"The target now is to consolidate our gains and grow our loan book," Hadebe said. - Additional reporting by Sapa