Sasfin’s sharp U-turn - income jumps 11.65%
Sasfin posted headline earnings of R141.1 million (2020: loss of R48.6 million) for the year ended 30 June 2021. This improvement was largely driven by an 11.65% increase in total income to R1.303 billion and improved credit performance. Return on equity improved to 9.11% (2020: -3.12%).
Each of the Sasfin pillars – Asset Finance, Wealth, Business Banking and Capital grew income in 2021. Sasfin Holdings Chief Executive Officer, Michael Sassoon said: “Our investment in new capabilities over the years has helped ensure that income exceeded our pre-pandemic 2019 level by 4.55%.”
Income growth was achieved while ensuring improved credit quality. “We worked closely with our clients during the Covid-19 pandemic and many of these clients have brought their accounts up to date contributing to a 14.16% reduction in non-performing loans,” he added.
According to Sasfin’s Financial Director, Angela Pillay, significant steps have been taken to streamline activities which will yield improved efficiency ratios in the future: “The cost-to-income ratio improved to 77.95% (2020: 82.20%) and excluding once-off headline adjustable items, the cost-to-income ratio would have improved further to 73.36%.”
“By onshoring our Hong Kong operations, exiting some of our non-core assets and preference shares, Sasfin has a leaner operation, with capital more appropriately allocated, enabling us to further grow our core activities,” she added.
Sasfin’s Asset Finance and Wealth pillars continue to show strong growth. The Asset Finance pillar delivered exceptional results, achieving an operating profit of R289.3 million (2020: R68.9 million); while Sasfin Wealth recorded operating profit of R77.5 million (2020: R65.1 million) as a result of growth in AUM to R53.899 billion (2020: R48.605 billion).
Sasfin continues to invest in its Business Banking and Capital pillars. These businesses reduced their combined operating loss to R44.9 million (2020: R105.7million). This combined area focuses on SMEs and larger businesses, through a combination of integrated digital business banking products and services, as well a high- touch diversified credit offering. “SMEs require attention more than ever, and we are providing critical funding and banking services, via our NASIRA partnership with the FMO (Dutch Entrepreneurial Development Bank) and within our B\\YOND business banking platform,” Sassoon said.
Sasfin will adopt a hybrid work model at the end of the year when it moves into new offices located at 140 West Street, Sandton, and will occupy 25% less space than it currently does, paying a lower rate per square metre.
In the spirit of Directive 4 of 2018 issued by the Prudential Authority, Sasfin’s long standing Chairperson, Roy Andersen and Non-Executive Director, Grant Dunnington will be retiring at Sasfin’s November AGM, with Deon De Kock taking over. “We welcome Mr De Kock as our new Chairperson and have no doubt that he will add considerable value to Sasfin in the years ahead. We are incredibly grateful for the invaluable contribution made by Roy Andersen and Grant Dunnington over the last decade and we wish them every success for the future,” added Sassoon.
“It has been a privilege to serve as Chair of Sasfin and to witness the many successes of the Group. I have no doubt that Sasfin will grow from strength to strength,” said Andersen.
“We emerge from the last 18 months stronger and are rebuilding our country by enabling the growth of the businesses and global wealth of our clients, who have shown incredible resilience during these unprecedented times. It has meant a huge team effort, a commitment to our clients, and quality partnerships and we are delighted to see the great improvements,” Sassoon concluded.
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