| Mon 5 Mar 2007, 9:53 | | SFN - Sasfin - Building strong foothold positionin |
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SFN
SFN
SFN - Sasfin - Building strong foothold positioning in entrepreneurial sector
delivers excellent growth in the six months to 31 December 2006
Sasfin Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/002097/06)
Share Code: SFN & ISIN Number: ZAE000006565
("Sasfin")
MEDIA RELEASE
Sasfin`s building strong foothold positioning in entrepreneurial sector delivers
excellent growth in the six months to 31 December 2006
Strong performance across all business units helped banking group Sasfin
increase profits 29% to R79,6 million in the six months ending 31 December 2006.
Profits attributable to the Group`s equity holders increased by 17% to R65
million (2005: R55,4 million), reflecting the issue, with effect from 1 January
2006, of 10% of the shares in Sasfin Bank and Sasfin Financial Services, with
effect from 1 July 2006 - to Sasfin`s black economic empowerment partner,
InnoVent Investment Holdings.
Headline earnings per share increased 18% to 244 cents (2005: 207 cents), and an
interim dividend of 73 cents (2005: 62 cents) per ordinary share was declared. A
preference share dividend of 442.09 cents per preference share was also
declared. The annualised return on ordinary shareholders` average equity dropped
marginally to 33.4%, from 37.4% in the previous year, while the 5.9% return on
total average assets remained constant.
The efficiency ratio, which reflects costs against income, remained constant
during the half year, at 56.3% The Group`s capital adequacy increased to 44.1%
(2005: 30.9%), while that of the bank - now a 90%-owned Group subsidiary -
almost doubled to 34.7% (2005: 19.3%). The higher ratios reflect the Group`s
conservative lending policy and a strategic decision to hold sufficient capital
to fund anticipated growth.
Looking specifically at the individual business units, Sasfin CEO Roland Sassoon
said the Business Banking division delivered a good performance. "We maintained
our rental finance earnings despite a very competitive market. Sasfin Capital`s
business units showed strong growth and the Personal Wealth business maintained
operating income at 2005 levels, despite a higher tax charge, but supported by
favourable market conditions on the JSE Ltd. Our international freight
forwarding and customs clearing business turned in a particularly pleasing
performance."
A number of strategic developments during the first half of the 2007 financial
year will have a positive impact on the Group, Sassoon said. "We made good
progress in restructuring our securitisation vehicle, and should finalise this
exercise in the current calendar year. The benefits we expect include a lower
cost of funding and the ability to securitise various asset classes."
He said Sasfin Bank was pleased to receive permission from the South African
Reserve Bank to become an authorised foreign exchange dealer, subject to SARB
approval of the operating and reporting systems. "The international treasury
business we are setting up will probably only make a marginal contribution in
the first year of operation, but thereafter we expect it to contribute
meaningfully to Group profits."
Another notable development during the six months under review was Financial
Services Board approval for an asset management license to be issued to Faranani
Asset Managers - a Sasfin subsidiary. "We intend to inject Sasfin funds into
this entity and promote it actively. We are very confident about long-term
prospects for this business."
In November, Sasfin announced it had decided not to proceed with the acquisition
of a bank in Mauritius. Sassoon said: "We believe that a banking operation in
another jurisdiction is more appropriate in terms of our strategy and we are
currently exploring various opportunities."
Until recently, the Private Equity division funded transactions from the
proceeds of the Group`s preference shares. In response to growing market
appetite for this asset class, this activity will now be enhanced by raising
third-party funding from high net worth individuals and small institutions.
"Until 2006, Private Equity was a relatively small operation, but we plan to
expand by launching funds for private and property equity. We expect that our
investment in property equity and property mezzanine financing will make a
significant contribution to profits in future," Sassoon added.
Looking ahead at the prospects for the second half of the 2007 financial year,
Sassoon said new business inflows remained strong and had not been negatively
affected by last year`s interest rate increases. "We are positioning Sasfin to
become the preferred banking group for entrepreneurs. This is delivering the
desired results, with our growing range of products and services showing strong
demand in the current buoyant economic environment."
For further information please contact:
Roland Sassoon - Group Chief Executive Officer of Sasfin Holdings Limited.
Telephone: 011 - 809 - 7778
Cell: 083 417 1100
Date: 05/03/2007 09:53:00 Produced by the JSE SENS Department.
