Sasfin Reports 27% Drop In Half-Year Headline Earnings
Group is Now Even Better Placed For Future Growth
Sasfin Holdings has not escaped the lag impact of the global recession on the South African economy – and on the banking sector in particular.
After holding steady in the year to 30 June 2009, headline earnings of the specialist banking and financial services group declined by 27%, from R65-million to R48-million, in the six months to 31 December 2009 – as a result of the combined effects of reduced trading volumes, increased overheads and a higher level of bad debt.
Nevertheless, supported by a firm capital base of over R1-billion in group equity, improved liquidity levels, and a far stronger operating infrastructure (in terms of human capital, new-age IT systems, and modern new headquarters) the group has a strong platform for future growth says Chief Executive Roland Sassoon.
A highlight of the half-year was the conclusion of a strategic partnership with the International Finance Corporation (IFC) – a member of the World Bank – which made an effective US$30-million commitment to Sasfin Holdings, by way of
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two injections totalling close to R160-million (US$20-million) in Tiers 1 and 2 capital, and
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a trade finance guarantee facility of US$10-million for the group’s Business Banking division.
“Coming at the height of the world economic crisis, this represents a tremendous vote of confidence in Sasfin,” says Sassoon.
Another stand-out feature of the half-year performance was the continued success of Sasfin’s securitisation structure (a leader in its market) which not only once again successfully refinanced its paper but also securitised a further tranche of R58-million – which was significantly oversubscribed - thus clearly underlining the exceptionally high quality of the assets.
Other key elements of Sasfin’s latest six-month performance include:
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a positive contribution to headline earnings by all divisions, albeit at lower levels
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a dilution in headline earnings per share – which came in 32% lower at 164 cents – as a result of the capital injection from the IFC
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a return on ordinary shareholders’ equity of 14% (compared with 22% previously)
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increases in capital adequacy in Sasfin Group from 31% to 35% and in Sasfin Bank from 21% to 31% - well above prescribed minimum requirements of 9,75%
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14% growth in total assets – from R3-billion to R3,5-billion
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a credit loss ratio of 2% (2008: 1,2%) on average loans and advances
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a virtually unchanged lending book of R1,9-billion
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a 14% increase in operating costs (from R193-million to just under R220-million) – largely as a result of infrastructural investment.
Ends
For further information please contact:
Roland Sassoon: Group Chief Executive Officer of Sasfin Holdings Limited
Telephone: 011 809 7778
Mobile: 083 417 1100 |