Banks have warned that the expropriation of land without compensation would result in the collapse of some financial institutions. The state-owned Land Bank says the institution could face more than R5 billion in liabilities which the state would have to pay.
Speaking at an agricultural seminar in Pretoria, Land Bank Chief Executive Officer Tshokolo Nchocho said the smash and grab of land would 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 R5 billion borrowed from international organisations and if the banking model of the Land Bank were to be disrupted that entire liability portfolio which sits in access of R30 billion, would have to be picked up by the state. If the path were to be taken of smash and grab, the Land Bank will go bust.”