The business might be “a drop in the ocean”, but specialist banking group Sasfin had been gaining market share in the provision of financial services to small businesses and investors, chief executive Roland Sassoon said yesterday.
In its financial results for the six months to December last year, released yesterday, Sasfin posted a 12 percent increase in headline earnings a share to R2.22 and grew assets by 36 percent to R7.4 billion.
It was the group’s business banking division that underpinned this performance, growing assets by 21 percent. Loans and advances grew to R3.8bn during the period under review.
“We see big growth coming in business banking and wealth. It is tiny growth, but we are getting the market share. We’ve increased our staff headcount and we are advertising. We are really open for business now,” Sassoon said.
The company, which offers business banking, wealth management, equity finance, non-banking commercial solutions and treasury services to entrepreneurs and investors, had a surplus liquidity position of R2.1bn, which Sassoon said would be partly used to grow all its business divisions.
Although the business banking division, which accounts for 61 percent of Sasfin’s profit, grew revenue by 17 percent, its profitability was negatively affected by the increase in credit loss ratio to 90 basis points, up from 30 basis points a year earlier.
Its profit, therefore, marginally decreased to R47.3 million from R48m. The group’s total credit loss ratio also rose sharply to 80 basis points from 40 basis points.
“It’s not because of a change in the market. We had an unfortunate experience with one client,” Sassoon said.
He said Sasfin’s business and operating environment still differed from that of the big banks. “It differs because we work very closely with our clients… Instead of going through a call centre, we visit the clients and we tailor a facility that is suitable for each one of them,” he said.
As a result of the close relationship, Sasfin managed to decrease its business banking clients’ non-performing loans to 4.2 percent from 5.3 percent.
The wealth management division grew profit by 42 percent to R22.1m from R15.5m. The treasury division grew its deposit base by 50 percent to R2.75bn. The capital division’s profit declined marginally to R5.3m and the commercial solutions business’s profit fell 8 percent to R15.3m.
Group costs rose 17 percent as Sasfin grew its staff headcount to 780. Shares sank 1.83 percent to close at R45.15.