Sasfin profit climbs in challenging economic conditions

Banking and financial services group Sasfin on Thursday (19 March) reported a 5.67% increase in earnings per share for the half-year ended December 2019.

Headlines earnings for the six month however, declined 2.27% due to adjustments in the prior year which have not recurred in the current year, it said.

Financial director, Angela Pillay, said that while the group was impacted by poor performance in direct Private Equity, core operations delivered pleasing results.

Profit was up 5.37% year on year, while total income (including income from associates) grew by 4.43% to R642.352 million.

Total assets grew by 6.86% to R14.53 billion with the group credit loss ratio improving to 117bps (December 2018: 123bps). Total Funding grew by 4.97% year-on-year to R10.4 billion (R9.911 billion) largely driven off good deposit growth of 10.95%, said Sasfin.

Sasfin Group chief executive officer Michael Sassoon said that while many local SME’s were under pressure amid challenging economic conditions, Sasfin’s operating model had remained resilient during this period, primarily through its core lending to carefully selected, growth-orientated businesses.

“We are particularly pleased with the improved credit performance, growth in our deposit book and growth in assets under management. In this regard, we have been able to support South African businesses and investors during difficult trading conditions and at the same time, remain relevant in a highly competitive lending environment.”

Pillar Performances

Banking Pillar revenue increased 2.88% year-on-year in tough economic conditions. Profit after tax for the year increased 17.29% to R68.157 million (December 2018: R58.108 million as a result of the decrease in impairments by 31.13%.

“We have continued to evolve our digital business banking platform, B\\YOND and now offer digitally enabled business loans and an App. This together with the Hello Paisa relationship, which is performing well, has resulted in improved performance in Transactional Banking,” said Sassoon.

The Wealth Pillar’s earnings remained largely flat with profit after tax of R25.721 million (December 2018: R25.780 million).

A strong performance by Sasfin Asset Managers, which together with increased foreign income as well as income from Wealth’s strategic investments was offset by lower portfolio management fees and brokerage generated from local equity markets.

Assets under Management and Advice increased significantly year-on-year by 18.4% to R44.077 billion (December 2018: R37.219 billion) due largely to an increase in institutional flows (with institutional AUM now exceeding R11 billion) as well as an increase in offshore assets under management to over R11.6 billion (December 2018: R9.1 billion).

“We continue to grow our deposit base off the back of our digital business banking platform and grow and enhance the quality and spread of our loans and advances in Sasfin Bank. Finally, we are reducing our exposure to direct Private Equity and have grown a strong lending franchise in Sasfin Capital,” said Sassoon.

Read: Sasfin goes after small business loans through its digital banking arm

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Sasfin profit climbs in challenging economic conditions