Sasfin results disappoint, as full year earnings drop 16%
Despite a disappointing decrease in headline earnings, Sasfin believes that future plans and growth strategies are set to see positive future prospects for the group.
This after the company released its annual audited for the financial year ending 30 June 2017, which saw a disappointing 16.34% decrease in headline earnings to R194.151 million (2016: R232.080 million) and headline earnings per share to 611.76 cents (2016: 731.27 cents).
The decrease was largely due to an increase in the credit-loss ratio from 108 bps to 124 bps arising from two unusual credit losses, and the impact of a mark-to-market loss on the group’s strategic investment in Efficient Group Limited (Efficient), the group said.
“While our results this year did not meet our expectations, we are positive about the upcoming year. This depends, however, on how the worrying political and economic environment unfolds,” says chief executive, Roland Sassoon.
“That said, we look forward to new initiatives such as our restructure to support the growth of the business; our empowerment transaction with Women Investment Portfolio Holdings Limited (WIPHOLD), which is subject to shareholder and regulatory approvals; and the expected acquisition of the Absa Technology Financial Solutions rental book,” he said.
Overall performance
Sasfin’s total assets grew by 14.71% (2016: 1.27%) to R12.623 billion (2016: R11,004 billion), driven by an 84.52% growth in cash and short-term negotiable securities to R3.525 billion (2016: R1.911 billion).
The tough economic and credit environment resulted in muted growth in gross loans and advances to customers of 4.06% (2016: 20.65%) to R6.711 billion (2016: R6.449 billion).
The group’s funding base grew by 22.95% (2016: 5.96%) to R8.979 billion (2016: R7.303 billion), largely driven by a 39.82% growth (2016: 2.12% decrease) in deposits from customers to R4.483 billion (2016: R3.207 billion).
During the year Sasfin also sold 70% of its investment in Imperial Sasfin Logistics to Imperial Holdings.
“Sasfin is confident about the future prospect of ISL under the control of the Imperial Group,” Sassoon said.
“Excluding the impact of Efficient and the deconsolidation of ISL, total income increased by 6.86%, predominantly as a result of the muted growth in loans and advances in Business Banking and flat revenue in Wealth, while operating costs increased by 9.12% (2016: 19.81%) following the Group’s continued investment in information technology, risk and compliance,” he said.
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