Sasfin reports decline in earnings
March 3, 2010
Financial services group Sasfin Holdings on Wednesday reported a 27 percent decline in headline earnings for the six months ended December from R65 million to R48 million.
Headline earnings per share showed a larger decrease of 32 percent year on year, declining from 239 cents to 164 cents, due to the dilutory effect of the new capital injection received from the IFC.
The group said its results were affected by marginal asset growth in its key areas of business and increased impairment losses, in an economy still feeling the "lag effect" of the global financial crisis.
The credit loss ratio increased to 2 percent on average loans and advances from 1.2 percent in 2008.
"The Group's investment in its infrastructural development impacted onoperating costs which grew by 14 percent year on year. This investment, coupled with the lower revenue levels, resulted in a poor efficiency ratio of 68 percent," Sasfin said.
Total assets grew by 14 percent to R3.5 billion (2008: R3 billion), underpinned by increased liquidity levels and investment in the group's new headquarters, while loans and advances showed a small growth of 1 percent.
Deposits increased marginally year on year and the group has maintained comfortable liquidity levels in a market constrained by liquidity shortages.
Following the capital injection received from the IFC, the total group equity exceeds R1 billion which presents a strong base for growth.
"Sasfin's securitisation structure, a leader in its market, once again successfully refinanced its paper and securitised a further tranche of R58 million, highlighting the quality of these assets."
"The Group maintains very comfortable levels of capital and at 31 December 2009, the statutory risk-weighted capital adequacy of the Group was 35 percent (2008: 31 percent) and that of Sasfin Bank Limited 31 percent (2008: 21 percent), which is well above the prescribed minimum requirement of 9.75 percent," the group stated.
Looking ahead, Sasfin said it is well positioned as a banking and financial services provider focusing on the entrepreneurial market.
"Notwithstanding the uncertainty and difficult economic conditions, the Group expects to continue at current levels of performance into the second half of the financial year."
"Sasfin is poised for future growth with its strong capital position, improved liquidity levels and investment in talent and systems," Sasfin added.
The group declared a preference dividend amounting to 401.51 cents (2008: 584.28 cents) per preference share for the six months ended 31 December 2009 on one million preference shares issued at 100 rand each and on 905000 preference shares issued at R110.49 each. - I-Net Bridge |