Sasfin Holdings Limited has produced satisfactory results for the six months ended 31 December 2014. Headline earnings per share increased 15% to 255 cents (December 2013: 222 cents) and the Group significantly strengthened its balance sheet.
Total assets grew by 16% to R9.2 billion, underpinned by a 14% growth in gross loans and advances to R4.36 billion (December 2013: R3.81 billion).
The Group has grown its investor and depositor base leading to an increase in its funding base to R6 billion (December 2013: R5.42 billion), representing a well-spread profile and tenor. This has led to the Group maintaining a healthy liquidity position which bodes well for its growth initiatives both organically and acquisitively.
CEO Roland Sassoon says that the growth in the Group’s headline earnings is driven by strong revenue growth, offset by a marginally higher credit loss ratio of 92bps (December 2013: 80bps) as well as a 9% increase in Group costs to R345 million (December 2013: R316 million).
Total income grew by 13% (December 2013: 15%) to R476 million (December 2013: R420 million) underpinned by a 20% growth in gross interest income and a 15% increase in non-interest revenue.
Group costs increased by 9% to R345 million (Dec 2013: R316 million), partly due to increased employee numbers in the Wealth and Transactional Banking divisions, highlighting the Group’s continuous efforts to contain cost growth. This is further evidenced by a reduced cost-to-income ratio in the Group to 72% from 74% and in the Banking Group to 62% from 65%. Encouragingly, the Group achieved a positive JAWS ratio of 4%, highlighting improved levels of revenue growth.
The key performance areas per division as follows:
The Business Banking division delivered flat results, with a 1% increase in profits for the period to R47.65 million (December 2013: R47.30 million). Loans and advances grew by 14% due to strong client retention, penetration into new markets and larger value transactions. These gains were, however, negatively affected by margin compression and a higher credit loss ratio of 98 bps, up from 90 bps in 2014, although non-performing loans as a percentage of the gross lending book showed a positive downward trend to 4.0% (Dec 2013: 4.2%).
The Wealth Management division delivered an impressive 49% growth in profit to R32.97 million (Dec 2013: R22.09 million) driven by strong revenue flows from all sectors of this division. This division’s aggressive growth strategies are yielding positive results with improved annuity income flows arising from increased local and globally-managed portfolios. These initiatives have contributed to the division’s increased portfolio of funds under administration and management amounting to R88.86 billion (Dec 2013: R77.01 billion).
Transactional Banking was successfully launched late in 2014 in a seamless and cost-efficient manner. The Group is optimistic about being able to become the primary banker to its clients by offering a comprehensive range of electronic banking services. Domestic Treasury, which has been combined within the Transactional Banking unit, continued to grow its deposit base to R3.0 billion, an increase of 8% over the corresponding period. The deposit book remains well diversified with fixed and notice deposits comprising just under 50% of the total deposit book. This division remains a strong contributor to the Group having generated a profit of R7.89 million (Dec 2013: R6.63 million).
The Capital division showed an increase in profitability to R6.45 million (Dec 2013: R5.27 million) following a satisfactory performance from the Private Equity and Property Equity units underpinned by strong deal flow.
Commercial Solutions recorded an 18% decrease in profitability to R12.65 million due to tough trading conditions and lower import values experienced in the freight and incentives businesses. The Forex unit, following its transfer from Transactional Banking for renewed management focus, achieved a break-even result for the period, reversing a R2.3 million loss in the six months to December 2013.
The Group maintains a high capital adequacy ratio of 24%, and a primary Tier 1 capital adequacy ratio of 23%, which is a key measure of capital strength in terms of Basel III, both well above the minimum regulatory requirements.
Sassoon says: “Sasfin is well poised for sustainable growth and further expansion of its franchise value in its chosen markets. This growth will be aided by the recently-launched Transactional Banking service offering and, subject to regulatory approval, the pending acquisition of Fintech, an equipment rental financier, as previously announced.”
Issued on: 9 March, 2015
For media queries, please contact:
Sasfin E-mail: Cathryn.Pearman@Sasfin.com
Tel: (+27) (11) 809 7851
Fax: (+27) (86) 520 4359
Cell: (+27) (82) 923 3214
Post: PO Box 95104, Grant Park 2051
Sasfin Holdings Limited (“Sasfin” or “the Group” or “the Company”) is a bank-controlling company listed in the “Financials: Investment Services” sector of the JSE Limited (“the JSE”). Sasfin and its subsidiaries provide a wide range of complementary banking, financial and related services.