Sasfin posts 29% jump in headline earnings
BANKING and financial services group Sasfin yesterday reported a 29 percent increase in headline earnings to R232.08 million for the year to end June supported by its business banking division, which reported a 32 percent growth in earnings.
The group also saw its total income for the year growing 25.1 percent to R1.2 billion, up from R956.6m reported in 2015, while profit attributable to equity holders rose by 25.6 percent to R224.4m.
Chief executive Roland Sassoon said although he was satisfied with the results, he stressed that the uncertainty in the political landscape was not an ideal situation for business to operate in presently. “It is quite difficult to provide an outlook for the future because of the political situation we find ourselves in currently.
“If Pravin Gordhan is relieved from his duties as finance minister the country would be downgraded to junk status immediately in December. This will hurt our business as the markets need a stable environment to operate,” he said.
He said all the divisions reported profits with business banking recording a 32 percent rise to R156.29m and the wealth division increasing 18.6 percent to R76.41m.
Decline
Sassoon said the transactional banking and treasury division, however, reported a 36.9 percent decline in profits to R6.56m, down from R10.39m in 2015. “We are still investing in this division and we expect it to do well two years from now,” he said.
Commercial solutions and capital divisions grew their profitability by 7.6 percent and 60.3 percent respectively. The group’s headline earnings per share also increased by 29 percent to 731.27 cents per share, up from 566.74c per share 2015.
Gross loans and advances rose 20.6 percent to R6.45bn, but non-performing loans more than doubled, rising 101 percent in to R423m.
Ian Cruickshanks, the chief economist at the South African Institute of Race Relations, said: “The 29 percent increase in headline earnings is impressive. Sasfin has shown a steady growth over the years and we can expect the trend to continue in the future.”
Risks profile
Cruickshanks added: “The bank is benefiting because they are managing their risks profile very well. It has more than adequate funding with a strong capital base.”
Even though the 29 percent increase in headline earnings looked impressive for the industry it operates in, the market should not compare it with the other big banks, he said.
The board declared a final ordinary share gross cash dividend of 188.82c per share. Sasfin shares rose 2.36 percent percent on the JSE yesterday to close at R65.