| Thu 2 Mar 2006, 12:01 | | Sasfin Holdings Limited - Sasfin delivers 50% incr |
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SFN
SFN
Sasfin Holdings Limited - Sasfin delivers 50% increase in heps at interim stage
Sasfin Holdings Limited
Share code: SFN
ISIN: ZAE000006565
Press Release
Highlights
* Headline earnings per share up 50% to 207,1 cents
* Total assets up 22% to nearly R2 billion
* Profit after tax up 65% to R61,9 million
* Efficiency ratio improved 11% to 56,4%
* Return on ordinary shareholders average equity increases to 37,4%
* Capital adequacy up to 26% after BEE deal
Sasfin delivers 50% increase in heps at interim stage
Banking and financial services group Sasfin has delivered excellent results for
the six months to 31 December 2005, with headline earnings per share up 50% to
207,1 cents (2004: 138,2 cents), continuing the strong trend in recent reporting
cycles.
The group"s performance was lifted by strong income and profit growth in all
business units, and tight control of costs. CEO Roland Sassoon says the group is
"firing on all cylinders" and experiencing unprecedented demand for its products
and services, helped by a robust domestic economy and a growing client base,
particularly among entrepreneurs.
"Sasfin is niching itself as the preferred banking group for the entrepreneur, a
market that is not being particularly well serviced by the larger banks, and
this is reaping rewards," says Sassoon. "We continue to grow our client base
selectively and are able to offer a wider range of products and services.
"These results are extremely satisfying. All divisions within the group are
trading well and have made meaningful contributions to headline earnings."
Net income after tax grew 65% to R61,9 million (2004: R37,5 million), boosted by
strong profit growth in all key areas of the business. While net interest income
remained relatively steady at R56,2 million, non-interest income grew 38% to
R142,4 million (2004: R103 million).
The increase in operating expenses was contained to 12%, producing profit from
operations of R79,3 million, 54% higher than the R51,3 million posted for the
same period last year. Profit attributable to ordinary shareholders increased
55% to R55,4 million (2004: R35,7 million).
Business Banking was the largest contributor to headline earnings, posting a 46%
increase in earnings to R27,9 million for the period. Business Banking comprises
Equipment Rental Finance and Business Finance (trade, debtor and capital
equipment finance).
Sasfin Capital"s contribution to headline earnings jumped 51% to R13,4 million,
while Sasfin Personal Wealth, helped by a robust stock market, achieved a 64%
increase in earnings to R10,5 million. Now that shares in JSE Limited are traded
over the counter and the value of these shares has sky-rocketed, Sasfin has
revalued its JSE shares giving rise to a surplus of R24 million after providing
for a deferred Capital Gains Tax which has been taken direct to equity and not
through the income statement. Sasfin Capital comprises Private Equity,
Corporate Finance, Investment Banking, JSE Sponsorship and Treasury. Personal
Wealth includes the group"s stockbroking, funds management and financial
planning activities.
Sassoon says prospects for Sasfin Capital are particularly promising. "We have
made a substantial investment in Private Equity and we now have a strong team
focused on potential deals."
Sasfin increased its stake in the Sasfin-MDM Private Equity Fund I from 13,6% to
52,4% for an additional consideration of R34,8 million. The group also launched
Sasfin Private Equity Fund II, a R100 million generalist private equity fund,
and concluded its first investment in January 2006. Sasfin intends to issue a
further R100 million of preference shares, mainly to fund further private equity
investments.
Specialised Services achieved an equally impressive profit growth, up more than
60% over the previous comparable period. This division includes International
Forwarding and Clearing, Healthcare Consulting, Regulation 28 Consulting and
Short-term Insurance.
Other notable features of the results include an improvement to 56,4% in the
efficiency ratio (2004: 63,3%) and a 22% increase to nearly R2 billion in group
assets (2004: R1,6 billion). Capital adequacy strengthened during the period,
creating a solid foundation for future growth without the need to issue
additional ordinary shares.
The annualised return on ordinary shareholders funds increased to 37,4% (2004:
32,9%), indicating high levels of productivity and efficiency in the group.
Sassoon says the group has received Reserve Bank approval for the Black Economic
Empowerment deal announced in December 2005. In terms of this announcement
Innovent, a black-owned and operated financial services holding company
associated with Sasfin, subscribed for 10% of the bank"s equity for a
consideration of R66,7 million, effective 1 January 2006. Sasfin financed this
deal out of its own resources by subscribing for cumulative redeemable
preference shares in two special purpose vehicles wholly-owned by Innovent.
In another strategic development, the businesses of PIB Financial Services and
Sasfin Investment and Asset Managers (SIAM) have been merged as of 1 January
2006. Management now holds 32,5% of the equity in the enlarged business, with
Sasfin holding the balance. The deal strengthens SIAM"s management team, and
will be headed by PIB"s Gavin Came, a highly respected professional in the South
African financial planning market.
The group has invested substantial resources in preparing for Basel II, which
establishes risk guidelines for banks worldwide. "We see Basel II in a positive
light. It will help banks evaluate inherent risks, and we are currently busy
implementing the procedures necessary for compliance," says Sassoon.
Sassoon adds that the group"s infrastructure has been strengthened in terms of
human resources and support systems in order to service its growing client base,
and further growth is expected over the second half of the year.
2 March 2006
Ends
ISSUED FOR: SASFIN HOLDINGS LIMITED
CONTACT: Roland Sassoon Tel: 011 809 7778 / 083 417 1100
FAX NO: 011 887 6167
E-MAIL: rsassoon@sasfin.com
WEBSITE: www.sasfin.com
ISSUED BY: TISH STEWART PR ASSOCIATES
CONTACT: Tish Stewart 011 325 4195 / 082 443 6399
FAX NO: 011 325 4199
E-MAIL: tish@tspr.co.za
DATE: 02 March 2006
Date: 02/03/2006 12:02:01 PM Produced by the JSE SENS Department
