Increased borrowing by SA business clients fuels growth
Sasfin posted improved headline earnings of R166.7 million for the year ended 30 June 2022, up from R141.1 million in 2021. The better earnings were primarily a function of improved credit performance and enabled a total cash dividend for the financial year of 154.85 cents per share, 18.2% higher than the prior year.
Total income was flat due to divestment from non-core businesses. However, Group profit improved sharply to R183.9 million from R77.6 million, following an 18.6% increase in loans and advances to R8.6bn.
“This growth was achieved with lower credit losses, and the strong book growth should provide a good foundation for net-interest income returns in the year ahead,” said Michael Sassoon, CEO of Sasfin Holdings.
“We have seen increased demand for growth credit. The South African entrepreneurs, who we finance, are investing in growing their operations which is hopefully a good sign for the country during these volatile economic times. As a result, Sasfin achieved record loan growth for a single financial year,” he said.
Total assets increased 7.7% to R13.11 billion, supported by growth in deposits from customers which grew 10.56% to R5.23 billion. “Our improved performance is a result of identifying key markets where we can deliver value and then strengthening the distribution efforts in these areas. We continue to mature this capacity to achieve more appropriate scale,” Sassoon continued.
During the period, Sasfin identified the need for a restatement which negatively affected the opening retained earnings by 4.1% for financial periods before 2021. Notwithstanding this, the Net Asset value per ordinary share improved 11.86% to R52.13.
Asset Finance once again reported a noteworthy performance, achieving an operating profit of R254.8 million. “We foresee continued growth in this business as we increasingly finance new asset types such as software and climate-friendly solutions,” he indicated.
“In Sasfin Wealth, we are committed to building a world-class scalable asset management business,” Sassoon said, reflecting on Assets Under Advice and Management (AUM) reaching R59.2 billion. Despite this, the award-winning pillar showed a reduced operating profit of R58 million, mainly as result of a once-off operational loss of R45 million.
The merged Business & Commercial Banking pillar continues to gain momentum, with its operating loss improving 24,6% to R36.9 million, driven by a 26.2% increase in Loans and Advances and total income growth reaching R303.4 million. “As we transform the digital business banking experience, we continue to strengthen our client value proposition,” Sassoon said. “We are also growing our lending capabilities and have put the necessary funding – including NASIRA backed loans offered to women, youth and COVID-19-impacted businesses – and support in place to focus on SME lending with a personal touch.”
Internally, Sasfin has continued to build capacity by investing in human capital as well as operational and technological capabilities to ensure each pillar is well geared to embrace the changing technology landscape. “Sasfin has been focused on enhancing our financial and operational environment over the last few years which is resulting in a more streamlined business with stronger systems,” Harriet Heymans, Group FD, explains.
“The Group achieved healthy growth in headline earnings despite some challenges,” Heymans said. “In 2023, we will further scale our business by focusing on delivering outstanding value to our clients while driving operational excellence,” she concluded.
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