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Unaudited results and dividend declaration
Sasfin Holdings Limited
Incorporated in the Republic of South Africa
(Company registration number 1987/002097/06)
(“Sasfin” or “the Group” or “the Company”)
(Ordinary share code: SFN
ISIN: ZAE000006565)
(Preference share code: SFNP
ISIN: ZAE000060273)
www.sasfin.com
Unaudited results and dividend declaration for the six months ended
31 December 2012
Highlights
Sasfin MET Equity Fund: Winner of Two Raging Bull Awards 2012
Profit for the period up 20% to R73,7 million (2011: R61,2 million)
Headline earnings up 22% to R63,9 million (2011: R52,5 million)
Earnings and headline earnings per ordinary share up 22% to
198 cents (2011: 163 cents)
Dividends per share up 22% to 60 CENTS (2011: 49 cents)
Total equity remains the same at R1,2 billion (2011: R1,2 billion)
Total funding base up 5% to R3,8 billion (2011: R3,6 billion)
Deposits up 11% to R1,83 billion (2011: R1,65 billion)
Total gross loans and advances up 16% to R3,2 billion
(2011: R2,7 billion)
Total assets up 4% to R5,5 billion (2011: R5,2 billion)
Return on ordinary shareholders’ average equity up 1%
to 13% (2011: 12%)
Return on total average assets remains the same at 2% (2011: 2%)
Group capital adequacy remains the same at 29% (2011: 29%)
Financial highlights
% 31 December 31 December 30 June
change 2012 2011 2012
Unaudited Unaudited Audited
Consolidated
statement of
financial position
Total assets (Rm’s) 4 5 461 5 233 5 472
Total gross loans
and advances (Rm’s) 16 3 163 2 735 2 931
Non-performing loans
and advances (Rm’s) (35) 167 256 189
Income statement
Earnings
attributable to
ordinary
shareholders (Rm’s) 22 63,9 52,5 114
Headline earnings
(Rm’s) 22 63,9 52,5 111
Financial
performance
Return on ordinary
shareholders'
average equity (%) 13 12 12
Return on total
average assets (%) 2 2 2
Operating
performance
Non-interest income
to total income (%) 70 69 69
Efficiency ratio (%) 73 70 70
Credit loss ratio (%) 0,4 1,2 0,6
Non-performing loans
and advances to
total gross loans
and advances (%) 5 9 6
Share statistics
Earnings per
ordinary share
(cents) 22 198 163 355
Headline earnings
per ordinary share
(cents) 22 198 163 344
Diluted earnings
per ordinary share
(cents) 22 198 163 355
Diluted headline
earnings per
ordinary share
(cents) 22 198 163 344
Number of ordinary
shares in issue at
end of the period
(’000) 32 237 32 237 32 237
Weighted average
number of ordinary
shares in issue
(’000) 32 237 32 237 32 237
Diluted weighted
average ordinary
shares in issue
('000) 32 237 32 237 32 237
Dividends per
ordinary share
relating to profit
for the period
(cents) 22 60 49 137
Preference share
dividend number
17 (cents) 355,65 – –
Preference share
dividend number
16(cents) – – 351,55
Preference share
dividend number
15 (cents) – 340,27 340,27
Net asset value
per ordinary share
(cents) 6 3 056 2 880 2 986
Capital adequacy
Group capital to
risk weighted
assets (%) 29 29 30
Sasfin Bank
Limited capital
to risk weighted
assets (%) 24 25 26
Employees
Permanent staff
complement 713 710 684
Consolidated statement of financial position
% 31 December 31 December 30 June
change 2012 2011 2012
All figures in R’000 Unaudited Unaudited Audited
ASSETS
Cash and cash
balances 1 273 800 1 270 831 1 477 648
Short-term
negotiable
securities 153 462 86 125 69 056
Loans and advances 17 3 069 587 2 632 441 2 834 420
to customers
Other receivables 419 526 371 455 449 382
Non-current assets
held for sale – – 50 614
Investment
securities 301 003 426 951 342 145
Investment in
associated
companies 93 661 83 939 89 898
Property, plant
and equipment 56 317 206 815 57 392
Investment property – 51 038 –
Taxation 819 1 495 8 480
Intangible assets
and goodwill 83 007 90 346 85 506
Deferred tax asset 9 822 11 866 7 952
Total assets 4 5 461 004 5 233 302 5 472 493
LIABILITIES
Interbank funding 64 474 90 126 137 717
Deposits from
customers 11 1 834 491 1 646 999 1 787 300
Debt securities
issued 1 378 493 1 297 949 1 297 986
Long-term loans 538 249 604 617 538 576
Other payables 381 291 369 248 455 357
Taxation 16 331 12 065 5 037
Deferred tax
liability 61 494 56 327 70 305
Total liabilities 4 274 823 4 077 331 4 292 278
EQUITY
Ordinary share
capital and share
premium 162 732 162 732 162 732
Reserves 822 377 765 825 799 964
Preference share
capital and share
premium 199 278 199 278 199 278
Total equity
attributable to
equity holders of
the Group 1 184 387 1 127 835 1 161 974
Non-controlling
interest 1 794 28 136 18 241
Total equity 1 186 181 1 155 971 1 180 215
Total liabilities
and equity 4 5 461 004 5 233 302 5 472 493
Commitments and
contingent
liabilities 273 655 97 587 287 273
Consolidated statement of comprehensive income
% 31 December 31 December 30 June
change 2012 2011 2012
All figures in R’000 Unaudited Unaudited Audited
Interest income 240 507 220 436 434 000
Interest expense 129 416 125 866 231 914
Net interest income 18 111 091 94 570 202 086
Non-interest income 24 254 370 205 794 448 230
Total income 22 365 461 300 364 650 316
Impairment charges
on loans and
advances (58) 6 381 15 304 16 594
Net income after
impairments 359 080 285 060 633 722
Operating costs 26 270 385 214 894 474 659
Staff costs 136 968 115 600 245 774
Other operating
expenses 133 417 99 294 228 885
Profit from
operations 88 695 70 166 159 063
Share of
associated
companies’
income 6 948 8 509 15 452
Profit before
income tax 22 95 643 78 675 174 515
Income tax expense 21 938 17 426 41 561
Profit for the
period 20 73 705 61 249 132 954
Other comprehensive
(loss)/income for
the year, net of
income tax (1 258) 5 269 4 162
Foreign exchange
differences on
translation of
foreign operations 5 184 32 560 25 875
Net gains on
remeasurement of
available-for-sale
financial assets 1 138 – –
Net loss on hedge
of net investment in
foreign operation (7 580) (27 291) (21 713)
Loss on hedge of net
investment in
foreign operation (10 528) (37 904) (30 157)
Income tax effect 2 948 10 613 8 444
Total comprehensive
income for the
period 72 447 66 518 137 116
Profit attributable
to:
Non-controlling
interest 2 988 2 453 5 741
Preference
shareholders 6 773 6 377 12 859
Equity holders of
the Group 22 63 944 52 419 114 354
Profit for the
period 73 705 61 249 132 954
Total comprehensive
income attributable
to:
Non-controlling
interest 2 988 2 453 5 741
Preference
shareholders 6 773 6 377 12 859
Equity holders of
the Group 62 686 57 688 118 516
Total comprehensive
income for the
period 72 447 66 518 137 116
Earnings per
ordinary share
(cents) 22 198 163 355
Diluted earnings
per ordinary share
(cents) 22 198 163 355
Condensed consolidated statement of changes in equity
31 December 31 December 30 June
2012 2011 2012
All figures in R’000 Unaudited Unaudited Audited
Opening total
shareholders’ equity 1 180 215 1 108 871 1 108 871
Total comprehensive
income for the period 72 447 66 518 137 116
Profit for the period 73 705 61 249 132 954
Other comprehensive
income for the period
Foreign currency
translation reserve 5 184 32 560 25 875
Hedging reserve (7 580) (27 291) (21 713)
Available-for-sale
reserve 1 138 – –
Transactions with owners
recorded directly in equity
Acquisition of
non- controlling
interest without a
change in control (11 897) – (10 498)
Movement in
non-controlling
interest (19 435) 9 247 (3 936)
Share-based payments
reserve movement – – (363)
Preference share dividend (6 773) (6 377) (12 859)
Ordinary share dividend (28 376) (22 288) (38 116)
Closing balance 1 186 181 1 155 971 1 180 215
Condensed consolidated statement of cash flows
31 December 31 December 30 June
2012 2011 2012
All figures in R’000 Unaudited Unaudited Audited
Cash flows from
operating activities 54 639 25 001 99 457
Movement in operating
assets and liabilities (154 544) 489 081 358 742
Increase in loans and
receivables (241 548) (314 759) (518 028)
Increase in funding 78 700 360 036 297 856
Decrease/(Increase) in
other receivables 35 179 50 689 (75 428)
Increase in deposits 47 191 431 553 571 854
(Decrease)/Increase in
other payables (74 066) (38 438) 82 488
Net cash flows from
operating activities (99 905) 514 082 458 199
Net cash flows used in
investing activities 53 600 (55 005) 129 124
Net cash flows from
financing activities – – –
Net (decrease)/increase
in cash and cash
equivalents (46 305) 459 077 587 323
Cash and cash equivalents
at beginning of the period 1 408 987 817 185 817 185
Effect of exchange rate
fluctuations on cash held 106 (9 432) 4 479
Cash and cash equivalents
at end of the period 1 362 788 1 266 830 1 408 987
Cash and cash balances 1 273 800 1 270 831 1 477 648
Short-term negotiable
securities 153 462 86 125 69 056
Interbank funding (64 474) (90 126) (137 717)
Cash and cash equivalents
at end of the period 1 362 788 1 266 830 1 408 987
Condensed segmental analysis
31 December 31 December 30 June
2012 2011 2012
All figures in R’000 Unaudited Unaudited Audited
Segment results
Business Banking 48 112 42 546 90 561
Capital 5 490 2 725 60
Treasury 1 795 674 5 856
Wealth Management 15 554 11 741 31 518
Commercial Solutions 16 661 8 318 19 246
Group (13 907) (4 755) (14 287)
Profit for the period 73 705 61 249 132 954
Segment revenue
Business Banking 259 712 238 809 475 264
Capital 33 887 38 271 62 153
Treasury 91 264 76 651 160 465
Wealth Management 72 723 61 628 137 007
Commercial Solutions 94 167 56 173 138 069
Group and Inter-segment
eliminations (49 928) (36 793) (75 276)
Total segment revenue 501 825 434 739 897 682
Segment assets
Business Banking 3 363 147 2 908 487 3 122 870
Capital 469 521 560 647 418 578
Treasury 2 329 564 2 328 762 2 280 610
Wealth Management 170 729 214 030 309 796
Commercial Solutions 239 326 224 896 220 122
Group and Inter-segment
eliminations (1 111 283) (1 003 520) (879 483)
Total segment assets 5 461 004 5 233 302 5 472 493
Segment liabilities
Business Banking 3 081 103 2 599 370 2 844 863
Capital 398 624 501 836 369 906
Treasury 2 342 473 2 329 771 2 272 593
Wealth Management 117 527 122 769 216 033
Commercial Solutions 119 727 121 415 113 884
Group and Inter-segment
eliminations (1 784 631) (1 597 830)(1 525 001)
Total segment liabilities 4 274 823 4 077 331 4 292 278
Condensed headline earnings reconciliation
% 31 December 31 December 30 June
change 2012 2011 2012
Unaudited Unaudited Audited
Earnings are
determined as
follows:
Earnings
attributable to
equity holders
of the Group 63 944 52 419 114 354
Headline adjustable
items – 37 (3 413)
Loss/(Profit) on
sale of property and
equipment – 37 (7 446)
Gross – 51 (10 607)
Tax Impact – (14) 3 161
Fair value
adjustment of
non- current
assets held
for sale – – 305
Headline earnings 22 63 944 52 456 110 941
Headline earnings
per ordinary share
(cents) 22 198 163 344
COMMENTARY
Nature of business
Sasfin Holdings Limited (“Sasfin” and/or “the Group”) is a
bank- controlling company listed in the “Financials: Investment
Services” sector of JSE Limited (“the JSE”). Sasfin and its
subsidiaries provide a wide range of complementary banking,
financial and related services.
Business review: Group performance
Business environment
• The South African economy faced a challenging environment with
high levels of social unrest and strike activity across many
sectors, coupled with continued uncertainty in the global arena and
Rand volatility. Growth opportunities were adversely affected which
resulted in a sluggish performance in almost all sectors of the
economy. Consequently, unemployment levels remained high with
rising levels of consumer indebtedness.
• The banking sector, whilst resilient, was subdued with the demand
for credit being mixed in most areas, and continues to be faced
with rapidly escalating regulation and increasing costs of
compliance.
Group overview
• Sasfin maintained its growth levels in its core business
activities and produced a solid set of results, showing a 20%
increase in profit. Total assets grew by 4% to R5,5 billion year
on year, underpinned by further growth in the Business Banking
division, where loans and advances reached R3,2 billion, a 16%
increase over the corresponding period of 2011.
• The Group’s headline earnings of R63,9 million
(2011: R52,5 million) reflect a 22% increase over 2011, with
headline earnings per share at 198 cents (2011: 163 cents) showing
a similar increase.
• During the period under review, the Group acquired the remaining
minority interests in IQuad Group Limited and subsequently
delisted the company from the JSE.
• Total income grew by an encouraging 22% for the period, driven
by the Group’s increasing top-line growth initiatives and
expansion of the non-interest revenue base. Net interest income
grew by 18% on the back of growth in loans and advances, which
partly offset the negative carry incurred on the interest cost
from the long-term loans.
• Total Group costs reflect a 26% increase over 2011. After
adjusting for the IQuad cost base which was fully accounted for
in this period, costs increased by 15%, largely to support the
growth initiatives of the Group through additional investment in
information technology and human resources. The Group’s cost-to-
income ratio remains high at 73% and was negatively impacted by
the negative carry incurred on the Group’s long-term loan funding
and increased information technology costs.
Segmental overview
• The Business Banking division delivered a strong set of results,
with earnings for the period of R48,1 million (2011: R42,5 million),
an increase of 13%. These results were positively impacted by the
16% growth in the lending book, margin retention and lower
impairment charges, which continued a downward trend, with the
annualised credit loss ratio at a Group level decreasing to 0,4%
on average loans and advances from 1,2% in 2011. The improved
credit performance also reflected a 35% decrease in non- performing
loans notwithstanding the growth in the book.
• The Wealth Management division continues to grow and build on
changes that were implemented over the past two years. Earnings
for the period showed an increase of 32% to R15,6 million
(2011: 26% – R11,7 million), driven primarily by increased trading
volumes, improved fee income and stronger performance from the
Asset Management unit.
• The Treasury division, whilst growing its deposit base, continued
with its expansion activities in its foreign exchange business
which is reaching profitability. The division reflected a marginal
increase in profits impacted by higher funding costs.
• The Capital division, following two years of disappointing
results, is recovering strongly, having cleared most of its
private equity legacy issues. The division showed an increase in
earnings to R5,5 million from R2,7 million in 2011, helped by an
improved performance from the Corporate Finance unit.
• The Commercial Solutions division, which comprises logistics,
short-term insurance, healthcare consulting and commercial
advisory activities of the Group, produced an encouraging set of
results, with earnings in excess of 100% over 2011. This was
primarily due to a strong performance from the IQuad group of
companies, which has now been fully integrated into the Sasfin
Group, and an improved result from the Logistics unit.
Statement of financial position and capital management review
• The Group’s deposit and funding continued to grow, with an
improved deposit mix and maturity profile. Overall, the Group’s
funding position remains healthy with a funding base of
R3,8 billion up from R3,6 billion last year.
• Sasfin’s securitisation vehicle, a leader in its market,
continues to perform well and has re-financed R242 million and
placed an additional R100 million of notes on favourable terms
in the 2012 calendar year, which was once again oversubscribed
in excess of three times.
• The Group maintains comfortable levels of capital. As at
31 December 2012, its statutory risk-weighted capital adequacy
ratio was 29% (2011: 29%) and that of the Bank 24% (2011: 25%),
which are well above the prescribed regulatory requirements and
the Group’s internal targets. The Group has a very solid Common
Equity Tier I ratio of 26% which is the main measure of capital
strength per Basel III.
• The Group is favourably positioned to meet the stringent new
Basel III requirements both at liquidity and capital levels, well
ahead of their respective implementation dates.
Prospects
• Sasfin continues to focus on its target market comprising the
entrepreneurial corporate, commercial and private client base,
and based on prevailing market conditions, the Group expects the
current levels of business activities to continue in the second
half of the financial year.
• Sasfin is poised for sustainable growth and expansion of its
franchise value in its chosen markets, following the significant
strategic initiatives and investments made in prior years.
Basis of preparation and presentation of the condensed interim
consolidated financial statements
The condensed unaudited interim consolidated financial statements
have been prepared in accordance with IAS 34 – “Interim Financial
Reporting” and the requirements of the Companies Act of South
Africa and in compliance with the JSE Listings Requirements and
the accounting policies applied conform to International Financial
Reporting Standards and the SAICA Financial Reporting Guides. The
same accounting policies and methods of computation are followed
in the interim financial statements as compared to the 2012 annual
financial statements. There are no material events subsequent to
the end of the interim period.
In terms of S29(1)(e)(ii) of the Companies Act, it is confirmed
that the preparation of these financial statements is done under
the supervision of Tyrone Soondarjee CA(SA), financial director
of the Group.
Preference share cash dividend
Notice is hereby given that the directors have declared a gross
cash dividend number 17 amounting to 355,6529 cents
(302,3050 cents per share net of 15% dividend withholding tax),
(2011: 340,27 cents) per preference share (“preference dividend”)
for the period 1 July 2012 to 31 December 2012 on one million
preference shares issued at R100,00 each and on nine hundred and
five thousand preference shares issued at R110,49 each. The
dividends have been declared from income reserves and no
secondary tax on companies (“STC”) credits has been used. The
preference dividend is payable to holders of preference shares
recorded in the register of the Company at the close of business
on Friday, 5 April 2013.
The salient dates relating to the preference dividend are as
follows:
Last day to trade cum the preference
dividend Wednesday, 27 March 2013
Preference shares commence trading
ex the preference dividend Thursday, 28 March 2013
Preference dividend record date Friday, 5 April 2013
Payment date of preference dividend Monday, 8 April 2013
Preference shares may not be dematerialised or rematerialised
between Thursday, 28 March 2013 and Friday, 5 April 2013, both
days inclusive.
Interim ordinary share cash dividend
The Group has a stated policy of declaring interim and final
ordinary share dividends equal in aggregate to 40% of headline
earnings. In accordance with this policy, the Board of Sasfin has
resolved to pay an interim dividend as set out below.
Notice is hereby given that an interim ordinary share gross cash
dividend of 60 cents (2011: 49 cents) per ordinary share
(“interim ordinary dividend”) for the six month period ended
31 December 2012 has been declared and is payable to ordinary
shareholders recorded in the register of the Company at the close
of business on Friday, 12 April 2013.
The following further information is provided to shareholders in
respect of the new dividends tax:
• The dividend has been declared from income reserves.
• The dividend withholding tax rate is 15% and no STC credits have
been used. A net dividend of 51 cents per share is paid to those
shareholders who are not exempt from dividend withholding tax.
• Sasfin’s tax reference number is 9300/204/71/7.
• The issued number of ordinary shares at declaration date is
32 301 441.
The salient dates relating to the ordinary dividend are as
follows:
Last day to trade cum the interim
ordinary dividend Friday, 5 April 2013
Ordinary shares commence trading
ex interim ordinary dividend Monday, 8 April 2013
Ordinary share dividend record date Friday, 12 April 2013
Payment date of interim ordinary
dividend Monday, 15 April 2013
Ordinary share certificates may not be dematerialised or
rematerialised between Monday, 8 April 2013 and Friday,
12 April 2013, both days inclusive.
For and on behalf of the board.
CN Axten RDEB Sassoon
Chairman Chief executive officer
11 March 2013
This announcement and additional information is available on the
website: www.sasfin.com
Non-executive chairman
CN Axten#
Executive directors
RDEB Sassoon* (Chief Executive Officer) TD Soondarjee (Financial
Director)
* British
Non-executive directors
R Andersen#, ETB Blight#, GC Dunnington#, DD Mokgatle#, J Moses#, MS
Rylands
# Independent
Group company secretary
H Brown
Registered office
29 Scott Street, Waverley 2090
Johannesburg
Tel: +27 11 809 7500
Fax: +27 11 887 6167/2489
Transfer secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg 2001
P O Box 61051, Marshalltown 2107
Lead sponsor
KPMG Services (Pty) Limited
Joint sponsor
Sasfin Capital (a division of Sasfin Bank Limited) Corporate Law
Advisors
Edward Nathan Sonnenbergs Inc.
Disclaimer
The Group has in good faith made reasonable effort to ensure the
accuracy and completeness of the information contained in this
document, including all information that may be regarded as
“forward-looking statements”.
Forward-looking statements may be identified by words such as
“believe”, “anticipate”, “expect”, “plan”, “estimate”, “intend”,
“project”, “target”.
Forward-looking statements are not statements of fact, but
statements by the management of the Group based on its current
estimates, projections, expectations, beliefs and assumptions
regarding the Group’s future performance and no assurance can be
given to this effect.
The risks and uncertainties inherent in the forward-looking
statements contained in this document include but are not limited
to changes to IFRS and the interpretations, applications and
practices subject thereto as they apply to past, present and
future periods; domestic and international business and market
conditions such as exchange rate and interest rate movements;
changes in the domestic and international regulatory and
legislative environments; changes to domestic and international
operational, social, economic and political risks; and the effects
of both current and future litigation.
The Group does not undertake to update any forward-looking
statements contained in this document and does not assume
responsibility for any loss or damage and howsoever arising as a
result of the reliance by any party thereon, including, but not
limited to, loss of earnings, profits or consequential loss or
damage.
Date: 11/03/2013 10:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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