| Mon 11 Sep 2006, 12:40 | | Sasfin posts 23 |
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SFN SFNP
SFN
Sasfin posts 23,7% increase in headline earnings
SASFIN HOLDINGS LIMITED
(Incorporated in the Republic Of South Africa)
(Registration number 1987/002097/06)
Ordinary Share Code: SFN & ISIN: ZAE000006565
Preference Share Code: SFNP & ISIN: ZAE000060273
("Sasfin")
Sasfin posts 23,7% increase in headline earnings
* Headline earnings per ordinary share 404 cents: 23,7% increase
* Return on ordinary shareholders" average equity: 31,2%
* Efficiency ratio improved from 61,1% to 57,9%
* Group risk-weighted capital adequacy: 37%
* Return on total average assets: 5%
* Ordinary dividends per share 161 cents: 23,8% increase
Banking and financial services group Sasfin posted a 23,7% increase in headline
earnings per share (HEPS) for the year to 30 June 2006, with improved
profitability from all divisions. This comes after a 38% increase in HEPS the
previous year.
CEO Roland Sassoon says the group continues to consolidate its position as the
preferred banking group for the entrepreneur. "All business units performed
well, and the group was aggressive in pursuing business opportunities. These
results are particularly pleasing, showing sustained growth over several years."
The group managed its cost base well, and the efficiency ratio improved to 57,9%
from the previous year"s 61,1%. Total group assets showed strong growth of 47%
to R2,5 billion (2005: R1,7 billion), reflecting the increased level of activity
in all divisions. The statutory risk-weighted capital adequacy of Sasfin Bank
was 28,3% (2005: 25,7%).
The group"s return on total average assets was 5% for the year, well above that
typically earned by its peers. The return on shareholders average equity for the
year was 31,2% (2005: 33,5%).
Two major corporate actions during the year were:
- the acquisition by black economic empowerment company InnoVent
Holdings of 10% of Sasfin Bank"s equity; and
- the acquisition, through Hong Kong subsidiary Sasfin Asia Limited, of SBM
Nedbank International, a specialist bank registered in Mauritius. Approval for
this acquisition is under consideration by the regulatory authorities.
At the divisional level, Business Banking"s contribution to profits was R54,7
million (2005: R46,8 million), with trade, debtor and capital equipment finance
posting excellent results.
The Capital division - including the group"s Private Equity, Corporate Finance
and Treasury and Securitisation activities - also had a good year with profits
of R22,4 million (2005: R15,6 million). All units did well. Treasury and
Securitisation increased deposits by 56% to R627 million (2005: R402 million).
It also successfully raised R100 million of Perpetual Preference share capital
for investment in private equity. Sasfin"s securitisation commercial paper has
remained constant at R670 million, whilst it undergoes major re-engineering in
order to transform to a Domestic Medium Term Note programme.
It was also an excellent year for Personal Wealth, which increased its
contribution to R23,2 million from R17,1 million the previous year. Sasfin
Frankel Pollak Securities grew assets under management by 42,1% to R21,9
billion, and a R49 million capital gain was realised through the sale of the
firm"s interest in JSE Limited, which is not included in headline earnings.
The Financial Planning Unit was turned around by the acquisition in January 2006
of PIB Financial Services, a long-established financial planning consultancy
based in Johannesburg and Pretoria. It is expected that with penetration of the
broader Sasfin client base, profitability in this business will improve
significantly.
Specialised Services comprises Freight, Healthcare Consulting, Regulation 28
Consulting, Short-term Insurance Broking and Employee Benefits. All Specialised
Services units performed well, with the combined profit contribution increasing
from R5 million to R5,7 million.
In terms of Black Economic Empowerment, the group has submitted its 2005
empowerment scorecard to the Financial Sector Charter Council and its
empowerment programme is ahead of schedule. Sassoon says the group is well
placed to achieve the 2008 charter targets.
Prospects
Several new business opportunities have been identified and will be pursued in
the coming financial year. Sasfin has applied for a foreign exchange licence
that will enable it to provide a wide range of foreign exchange services, and
plans are well advanced for the launch a property financing division to provide
senior and junior debt and equity, subject to the South African Reserve Bank
approval.
Sassoon says future performance will be influenced by the level of economic
activity in general, interest rate patterns and the performance of the stock
exchange. "Indications are that the current level of business activity being
experienced by the group will be sustained for the forthcoming financial year.
Recent increases in the rate of interest have not had any significant adverse
effects and new business inflows continue to be strong."
Sassoon adds that the Group"s operations are supported by a high level of
capital adequacy at 37% and are benefiting from the ongoing investments made in
recent years in human resources, support systems and brand development.
Ends
ISSUED FOR SASFIN HOLDINGS LIMITED
CONTACT Roland Sassoon Tel: 011 809 7778 / 083
417 1100
FAX 011 887 6167
EMAIL rsassoon@sasfin.com
WEBSITE www.sasfin.com
ISSUED BY LETSEMA COMMUNICATIONS
CONTACT Tish Stewart 011 325 4195 / 082 443 6399
FAX 011 325 4199
EMAIL tish@letsemacom.co.za
DATE 11 September 2006
Date: 11/09/2006 12:40:11 PM Produced by the JSE SENS Department
