JOHANNESBURG - Sasfin Holdings expects a challenging trading environment in the next six months amid the Covid-19 economic crises and in reporting its interim results, the banking and financial services group said it would be cautious in extending credit.
For the six months to end December, Sasfin’s credit loss ratio improved 117 basis points (bps) from 123 bps compared to last year. It saw a 5.37percent increase in profit to R87million, primarily due to a 3.24percent improvement in the impairment charge as a result of improved credit quality. The group also presented a five-point plan to manage the impact of Covid-19 on its business.
Sasfin warned that there had been a marked increase in business insolvencies in South Africa over the past 12 months and “it would seem as though this is not going to abate”.
However, it said where companies had gone into business rescue, Sasfin had generally been successful in recovering its full exposure, but it had lost the clients.
“We are adopting a cautious approach to granting credit, and a very hands-on approach with our clients who have fallen on tough times. There are, however, many strong businesses in South Africa which require credit to grow their businesses, and a bank that is willing to work closely with them in these times. We are well placed to fulfil this role.”
Sasfin chief executive Michael Sassoon said while many local small-to-medium-sized enterprises were under pressure, Sasfin’s operating model had remained resilient during the period, primarily through its core lending to carefully selected, growth-orientated businesses.
Sasfin financial director Angela Pillay said yesterday that Covid-19 was evolving rapidly and the impact on local and global markets was volatile, severe and uncertain.
“This is to be expected for some time. Our response is based on what we know today and the best assessment of the future,” Pillay said.
She said the group had appropriate capital, liquidity and funding buffers to deal with short- to medium-term shocks.
Sasfin’s Covid-19 plan included creating a healthy and safe environment for all stakeholders, business continuity, financial stability, communication and client support.
“In the last two weeks we have tested most of these processes and by the end of this week we expect 50percent of our staff to be working from home, with all our services available,” she said.
Sasfin shares closed 2.86percent lower at R23.80 on the JSE yesterday.