Small businesses hit hard by Covid-19
countries seeking to combat the effects of Covid-19. “We want to be able to support our clients to the degree that is possible,” Sassoon said.
There has been a marked increase in business insolvencies in SA over the past 12 months, “and it would seem as though this is not going to abate”, the group said.
Sasfin said that when companies had gone into business rescue, it had generally been successful in recovering its full exposure, given the security positions it took, but unfortunately had lost clients.
BANKING DIVISION
Group profit rose about 5.4% to R87m in its six months to endDecember, with the group benefiting from improved profitability in its banking division, where impairments decreased by almost a third. The group’s banking pillar grew profit 17% to R68.15m.
Sassoon said impairments had risen over the past few years and the decrease had brought levels more or less in line with the company’s historical averages.
SA banks, including Standard Bank and FirstRand, have recently warned that credit impairment charges have risen, the former saying those rose almost a quarter in its year to end-December.
Sasfin said that while some of its clients were struggling in this economic environment, it had managed to enhance the overall credit quality of its book by reducing exposure to high-risk clients while ensuring book growth from better credit quality clients.
The group’s wealth pillar saw a slight decline in profit as it continues to be hit by lower brokerage and portfolio management fees, due to the state of SA’s equity markets.
An analyst who asked not to be named said that things were undoubtedly getting tougher for SA business, particularly for smaller businesses without deep pockets.
But it was questionable just how much the government could afford given the state of the budget deficit, the analyst said.
The Sasfin share price closed 2.9% lower at R23.80 and is down 18% so far in 2020. The JSE banks index is down 47% so far in 2020.