AGRICULTURE NEWS - It has been a rough first few months of the year for the Land and Agricultural Development Bank of South Africa (Land Bank).
The bank, a wholly government owned development finance institution, is experiencing a liquidity shortfall following two credit ratings downgrades by Moody’s Investor Service in January and March this year, leading to the bank defaulting on one of its loans.
Earlier this month Land Bank missed a loan payment, leaving government liable for about R5,7 billion of guaranteed debt.
According to a Johannesburg Stock Exchange News Service (SENS) statement South Africa’s National Treasury had increased guarantees to the bank to R5,7 billion in February, which the bank was using to raise funding.
While the bank was one of the few state-owned entities making a profit, it was uncertain whether government would honour these guarantees amidst the economic crisis emerging out of the coronavirus disease (Covid-19) pandemic, the statement added.