Sasfin says results beat bigger rival banks
Grew the lending book and built a solid platform for future growth
JSE-listed independent banking and financial service firm Sasfin yesterday reported a modest 10% increase in headline earnings in the six months to December.
CEO Roland Sassoon said the results were better than the "patchy" performances of rival bigger banks who have struggled to grow revenue in the face of weak credit demand.
Sasfin provides working capital and other banking facilities and products to small and medium-sized firms, a sector that Sasfin says continues to be neglected by the larger banks.
Mr Sassoon said the group’s earnings rose to R53m compared with R48m, even though headline earnings per share remained flat at 163c due to the dilutionary effect of capital injection into Sasfin. An interim dividend of 49c a share was declared (2009: 46c).
The results were positively affected by the business banking division, which contributed about 56% to group earnings, having benefited from growth in assets, particularly in the rental finance book.
Mr Sassoon said total assets grew 18% to R4,1bn year on year, underpinned by solid growth in the business banking division. Loans and advances grew 20% to R2,4bn, and the bank expected to benefit from flowing interest income in the forthcoming financial periods.
He said credit impairment losses continued a positive downward trend, which reflected the improving credit environment as customers benefited from lower interest rates.
"The annualised credit loss ratio decreased to 1,6% on average loans and advances, from 2,1% in 2009, with nonperforming loans and advances to total gross loans and advances down by 22% on 2009," said Mr Sassoon.
He promised shareholders Sasfin would maintain this performance despite the tough trading environment facing banks.
"We have concentrated on growing our lending book and we have built a solid platform for future growth, but from now on we will be putting more emphasis on the noninterest-fee income side of our business and on managing our costs down," he said.