DURBAN – Sasfin Holdings’ banking segment reported a stellar 95.51 percent increase in headline earnings to R110.39 million in the year to end June, boosted by an 8.87 percent growth in income and a 39.6 percent improvement in impairment charges.
The listed financial services group said the division became the star performer, helping to lift its overall performance during the period.
Chief executive Michael Sassoon said asset finance was a significant contributor to group profitability and added focus was given to this division to unlock further opportunities.
“We have enhanced our lending offering to medium businesses and there are promising signs from the changes made in our trade and debtor finance business as well as the improvement in our credit function,” Sassoon said.
Sasfin overall headline earnings rose 32.05 percent to R161.31m while headline earnings per share (Heps) increased 31.42 percent to 501 cents a share primarily on an improved credit loss ratio to 102 basis points (bps) compared to last year’s 197bps.
Total income increased 2.21 percent to R1.25bn, with earnings growth in both Sasfin Bank and Sasfin Wealth.
Income in Sasfin Wealth increased by 11.23 percent.
The group also reported that total assets increased by 1.97 percent to R14.60bn and gross loans and advances remained largely flat at R7.89bn. However, since half year, loans and advances grew by 5.8 percent following a decline in the first half of the year.
Sassoon said this was a year of concentrating on the fundamentals of their business, in particular improved credit quality.
“Where possible, we narrowed the scope of responsibility for executives to enhance accountability. Following the management changes in 2018, significant attention was given to defining and delivering value to our key client segments.
"Sasfin is well positioned to grow within these segments through focus on distribution,” Sassoon said.
Sasfin also managed to report headline earnings growth in the wealth segment, which ticked up 28.8 percent to R40.35m, mainly due to increased foreign income, institutional asset management fees and income from strategic investments.
However, the capital segment offset the growth by reporting a decline in headline earnings to R4.81m, down from last year's R37.51m.
Sassoon said this performance was a result of lower mark-to-market valuations in private equity and reduced corporate advisory fees.
The group declared a final ordinary share cash dividend of 50c a share and together with the interim ordinary dividend of 49.86c, to take the total dividend to 99.8c.
Sassoon said the primary aim for 2020 was to ensure that Sasfin’s distribution engine worked optimally.
“Each of our businesses can grow meaningfully by acquiring a small percentage of market share within their target client segments,” he said.
Sasfin's shares closed 6.38percent lower at R32.28 on the JSE on Tuesday.