JOHANNESBURG– A South African bank has warned that the planned expropriation of land without compensation as endorsed by Parliament will result in the collapse of some financial institutions.
State-owned Land Bank says it could face more than 5.0 billion Rand (about 422 million US dollars) in liabilities which the State would have to pay.
Speaking at an agricultural seminar in Pretoria Tuesday, Land Bank Chief Executive Officer Tshokolo Nchocho said the land grab would also undermine the country’s lending model.
Nchocho, however, says he is confident that the country will not go that route.
The Land Bank is funded through borrowings. We have in access of 5.0 billion Rand borrowed from international organizations and if the banking model of the Land Bank were to be disrupted, that entire liability portfolio which sits in access of 30 billion Rand, would have to be picked up by the State. If that path is to be taken of smash and grab, the Land Bank will go bust.
Source: NAM NEWS NETWORK