Financial services group Sasfin on Wednesday (3 March) reported a decline in both revenue and profit for the six months ended December 2020, primarily due to increased year-on-year credit impairment provisions as a result of the impact of Covid-19 and the associated lockdowns on South African businesses.
Revenue for the period declined 1.5% to R633 million, while profit before income tax fell 52.7% to R56.4 million.
Headline earnings for the period declined 65.8%, and headline earnings per ordinary share by the same amount to 83.54 cents per share, from 244.44 cents per share.
Proactive cost management saw total costs decline by 6.55%, resulting in the group’s cost-to-income ratio improving by 3.85% to 70.48% (2019: 74.33%).
Sasfin financial director, Angela Pillay said that the group’s balance sheet is strong, with cash and near cash at R2.338 billion, from R2.433 billion in 2019. Total deposits declined 3.08% to R4.831 billion, she said.
“The capital and liquidity position the group finds itself ensure that we are well placed to withstand further shocks and take advantage of opportunities as they present themselves”, Pillay said.
Total assets declined 13.57% to R12.5 billion, with net loans and advances contracting 13.42% to R6.36 billion, caused by lower demand and the conservative credit approach adopted during the lockdowns.
Asset Finance posted lower operating profit of R82.4 million (2019: R101.4 million) due to increased impairments. According to chief executive officer Michael Sassoon, income in the Pillar increased 8.94% to R288 million (2019: 264.3 million), attributable to improved better margins offset by lower lending volumes.
“We continue to diversify the book and expand our offering, with specialised equipment finance growing to 22% of the total Asset Finance book (up from 19% in 2019),” he said.
B\\YOND Business Banking, Sasfin’s digital banking platform which now incorporates the group’s foreign exchange operations, reduced its operating loss to R15 million (2019 loss: R22 million). “This was achieved, largely due to a 9.58% cost saving over the period, following the integration of the business units.
Transactional banking grew revenue 14.02% through increased client volumes, despite lower interest rates.
“The next step in our digital banking evolution is to increase the credit offering to small businesses off the back of the Nasira offering. This should enable us to win new business clients across our total product suite,” Sassoon said.
We are well placed to continue to enable our clients to grow their businesses and global wealth,” he said.