Johannesburg - Sasfin Holdings [JSE:SFN] reported strong growth
for the year ended June 30, with total assets raised by 25% to R5.5bn.
In its financial results released on Monday, Sasfin's profit
before tax increased 30% to R174m.
The company's effective tax rate jumped from 15% in 2011 to
24% in 2012 due to, among others, a capital gains tax payable on the disposal
of its head office.
The company's headline earnings increased 16% to R111m.
Sasfin is a niche banking and financial services provider.
"Once again, revenue generation was driven principally
by the business banking division where loans and advances grew to a total of
R2.9bn, a 21% increase on the previous year," Sasfin CEO Roland Sassoon
The business banking division produced a net profit for the
year of R90m, slightly up, and contributed 68% towards group profits.
"The key drivers in the divisional performance were
strong growth in loans and advances, margin retention and lower impairment
"The inherent quality of Sasfin's lending book and
sound credit processes ensured that non-performing loans remained flat and the
credit loss ratio dropped from 1.7% to 0.6%, despite the growth in the
book," said Sassoon.
Profit made by the wealth management division increased from
R21m in 2011 to R31m in 2012. Sassoon said the wealth management division was
expected to be a key profit contributor to the group.
The capital division delivered a modest profit following a
change in capital gains tax rates and the underperformance of some legacy
investments in the private equity and private property equity business units.
"The new business model we have adopted in the private
equity area works better for us. We are now sharing participation in deals with
other private equity players which allows us to manage the concentration risk
better and reduce costs," he said.
Sassoon said the group's balance sheet was extremely strong.
Sasfin secured a seven-year loan of €35m (about R366m) from three European
development finance institutions and a $10m (about R82m) seven-year loan from
the International Finance Corporation and the Canadian government.
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