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Niche banking and financial services group Sasfin Holdings (SFN) on Monday reported a 16% rise in headline earnings from R96 million to R111 million for the year to the end of June.

This translated into headline earnings per share of 344 cents which were also 16% up on last year’s earnings of 297 cents per share.

Dividends per ordinary share for the 12-month period were also up 16% from 118 cents to 137 cents.

The group experienced a 25% growth in total assets to R5.5 billion while total equity was up 6% to R1.2 billion‚ with gross loans and advances up 21% to R2.9 billion.

“Despite the damaging events to the global banking industry of late‚ the local banking sector remained stable showing signs of recovery and a return of credit appetite in certain areas. The on-going changing regulatory environment has impacted growth opportunities and significantly increased costs of compliance‚” Sasfin commented.

“Sasfin continued on its growth trajectory in its core business activities and delivered a positive set of results with profit for the

year of R133 million‚ a 17% increase on 2011. Profit before tax reflected a strong increase of 30% year on year‚ following strong

revenue flows and a significantly lower impairment charge when compared to last year. However‚ a higher effective tax rate of 24% (2011: 15%) in the current year resulted in profits after tax of R133 million‚” the group added.

In line with its strategy to broaden its non-banking activities and increase its revenue generation capacity‚ the group acquired a 68.4% majority stake in Commercial Solutions listed company‚ IQuad Group Limited (“IQuad”) in November 2011.

The primary driver for this acquisition was to expand the group’s service and product offering and leverage off IQuad’s client base.

Sasfin remains well capitalised with a primary tier I equity ratio of 26% (2011: 27%)‚ and a total capital adequacy ratio of 30% (2011: 32%)‚ well above the South African Reserve Bank’s minimum requirements and the group’s internal targets.

This bodes well for the Group to meet the new Basel III capital regime‚ and on a pro-forma basis‚ the Group has a very solid Common Equity Tier I ratio of 27%‚ which is the main measure of capital strength in terms of Basel III.

Looking ahead‚ Sasfin said it was well positioned to grow its franchise‚ focusing on the entrepreneurial market and private client base.

“Despite the prevailing level of global economic uncertainty‚ the Group expects to see improved levels of business activity across all segments.

“Sasfin’s growth trajectory is indeed sustainable on the back of its strong capital position‚ improved liquidity levels and diversified funding and activity base‚” the group added. - I-Net Bridge