A com­plete en­tre­pre­neur of­fer­ing

Finweek English Edition - - INVESTMENT - SI­MON BROWN

BANK­ING STOCKS have been slowly mov­ing higher with three of the Big Four at or around all-time highs (Bar­clays Africa Group be­ing the ex­cep­tion). I cer­tainly ex­pect this trend to con­tinue and, as such, have a long po­si­tion in the Sa­trix Fini. How­ever, the ques­tion is where is growth com­ing from within the new nor­mal of higher cost bases (as seen in their cost-to-in­come ra­tio lev­els, which are stuck in the mid-50s)? Sure, prices will move higher, but sec­ond-tier banks likely of­fer bet­ter po­ten­tial and the best here is Sasfin.

A small niche bank aim­ing at the en­tre­pre­neur­ial mar­ket on a price to book of just over 1.1 times, a div­i­dend yield of around 3.8%, and a price-to-earn­ings ra­tio of around 9 times, which is cheap com­pared to its larger peers. Re­cent re­sults showed the com­pany do­ing well, with the iQuad trans­ac­tion yield­ing es­pe­cially good re­sults. It’s also plan­ning a trans­ac­tional bank­ing li­cence, which isn’t a game-changer but does mean that Sasfin will of­fer the com­plete suite to its clients.

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