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SASFIN HOLDINGS LIMITED - Interim results and dividend declarations

Release Date: 19/03/2019 10:20
Code(s): SFNP SFN     PDF:  
 
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Interim results and dividend declarations

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)

Unaudited condensed consolidated interim results and dividend declarations for the six months ended
31 December 2018

UP 59.89%
HEADLINE EARNINGS
R80.531m
(2017: R50.367m)*

UP 58.75%
HEADLINE EARNINGS
PER ORDINARY SHARE
250.12 cents
(2017: 157.56 cents)*

UP 5.78%
TOTAL
INCOME
R608.554m
(2017: R575.279m)*

UP 369bps
RETURN ON ORDINARY
SHAREHOLDERS'
AVERAGE EQUITY
10.53%
(2017: 6.84%)*

UP 356bps
COST TO
INCOME
73.96%
(2017: 70.40%)*

UP 3.14%
TOTAL
ASSETS
R13.572bn
(2017: R13.159bn)*

UP 2.30%
TOTAL
EQUITY**
R1.511bn
(2017: R1.477bn)*
** excluding preference shares and non-controlling interest.

UP 8.72%
GROSS LOANS AND ADVANCES
R7.455bn
(2017: R6.857bn)

DOWN 77bps
CREDIT LOSS
RATIO
123bps
(2017: 200bps)

UP 7.80%
FUNDING
BASE**
R9.911bn
(2017: R9.194bn)*
** including preference shares.

DOWN 5.57%
TOTAL ASSETS UNDER MANAGEMENT AND ADVICE**
R37.219bn
(2017: R39.413bn)
** excluding under administration.

DOWN 118bps
GROUP CAPITAL
ADEQUACY RATIO
16.479%
(2017: 17.657%)*

* restated.

FINANCIAL HIGHLIGHTS
at 31 December 2018

                                                                                           %  31 December  31 December    30 June
                                                                                      change         2018         2017       2018
                                                                                                Unaudited    Unaudited  Unaudited
                                                                                                              Restated
Consolidated statement of  financial position
Total assets (Rm's)                                                                     3.14       13 572       13 159     14 319
Total gross loans and advances (Rm's)                                                   8.72        7 455        6 857      7 904
Non-performing loans and advances (Rm's)                                               41.79          570          402        585
Income statement
Earnings attributable to ordinary shareholders (Rm's)                                  61.70       74.476       46.059    114.934
Headline earnings (Rm's)                                                               59.89       80.531       50.367    122.152
Financial performance
Return on ordinary shareholders' average equity (%)                                                 10.53         6.84       8.09
Return on total average assets (%)                                                                   1.15         0.78       0.91
Operating performance
Non-interest income to total income (%)                                                             59.02        60.15      61.22
Cost to income ratio                                                                                73.96        70.40      71.46
Credit loss ratio (bps)                                                                               123          200        197
Non-performing advances to total gross loans and advances (%)                                        7.65         5.86       7.40
Share statistics
Earnings per ordinary share (cents)                                                    60.54       231.31       144.08     358.68
Headline earnings per ordinary share (cents)*                                          58.75       250.12       157.56     381.21
Number of ordinary shares in issue at end  of the period ('000)                                    32 301       32 301     32 301
Number of ordinary shares in issue at end  of the period excl treasury shares ('000)               32 197       32 197     32 197
Weighted average number of ordinary shares in issue excl treasury shares ('000)                    32 197       31 967     32 043
Dividends per ordinary share relating to profit for the period (cents)**                6.33        49.86        46.89     151.26
Preference share dividend number 1  for the year                                                   418.09       427.42     427.42
Preference share dividend number 2  for the year                                                        -            -     414.03
Net asset value per ordinary share (cents)**                                            2.32        4 677        4 571    4 797***
Capital adequacy (provisional and unaudited)
Capital to risk weighted assets                                                                    16.479       17.657     15.136

*    This is based on the weighted average number of shares in issue, which changed following the WIPHOLD transaction concluded in October 2017
**   This is based on the total shares in issue, including treasury shares
***  Restated

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2018

                                                      31 December  31 December     30 June
                                                             2018         2017        2018
                                                        Unaudited    Unaudited     Audited
                                                            R'000     Restated       R'000
                                                                         R'000
ASSETS
Cash and cash equivalents                               1 112 997    2 110 006   1 892 167
Trading assets                                          1 214 157    1 510 965   1 476 511
Negotiable securities                                   2 762 151    1 614 519   1 975 407
Other receivables                                         361 970      455 087     375 380
Non-current assets held for sale                                -       19 500           -
Loans and advances                                      7 034 682    6 589 574   7 618 495
Taxation                                                   29 171       27 744      19 809
Investment securities                                     622 282      554 555     624 614
Private Equity and Property Equity investments            622 282      507 249     582 618
Strategic investments                                           -       47 306      41 996
Interest in Associates                                    109 388            -       3 879
Deferred tax asset                                         33 288       35 088      30 568
Property, plant and equipment                              74 412       95 617      88 206
Investment property                                        11 400            -      12 600
Intangible assets and goodwill                            206 169      146 788     201 448
Total assets                                           13 572 067   13 159 443  14 319 084
LIABILITIES
Funding under repurchase agreements and interbank       1 914 259    1 175 693   1 924 975
Trading liabilities                                     1 232 400    1 552 340   1 449 203
Current taxation liabilities                               25 692       23 829      21 819
Other payables                                            769 881      775 653     801 745
Deposits from customers                                 4 491 425    4 339 574   4 449 344
Debt securities issued                                  2 752 700    3 113 037   3 115 432
Long-term loans                                           564 368      377 605     674 616
Deferred tax liability                                    117 632      133 795     140 179
Total liabilities                                      11 868 357   11 491 526  12 577 313
EQUITY
Ordinary share capital and share premium                  167 266      160 103     167 266
Reserves                                                1 343 476    1 316 429   1 382 185
Preference share capital and share premium                188 086      188 086     188 086
Non-controlling interest                                    4 882        3 299       4 234
Total equity                                            1 703 710    1 667 917   1 741 771
Total liabilities and equity                           13 572 067   13 159 443  14 319 084

CONSOLIDATED INCOME STATEMENT
for the six months ended 31 December 2018

                                                                                 31 December  31 December      30 June
                                                                                        2018         2017         2018
                                                                                   Unaudited    Unaudited      Audited
                                                                                       R'000     Restated        R'000
                                                                                                    R'000
Interest income                                                                      656 850      619 169    1 281 874
Interest expense                                                                    (407 453)    (389 894)    (809 095)
Net interest income                                                                  249 397      229 275      472 779
Non-interest revenue                                                                 359 157      346 004      746 437
Non-interest income excluding fair value adjustments to strategic investments        350 469      345 198      752 471
Fair value adjustments to strategic investments                                        8 688          806       (6 034)

Total income                                                                         608 554      575 279    1 219 216
Impairment charges on loans and advances                                             (47 275)     (67 997)    (144 178)
Net income after impairments                                                         561 279      507 282    1 075 038
Operating costs                                                                     (454 933)    (405 051)    (871 274)
Staff costs                                                                         (255 288)    (219 016)    (453 741)
Other operating expenses                                                            (193 590)    (180 202)    (408 097)
Goodwill and Intangible asset impairments                                             (6 055)      (5 833)      (9 436)

Profit from operations                                                               106 346      102 231      203 764
Share of Net Profit from Associates                                                    6 563           50          110
Profit before income tax                                                             112 909      102 281      203 874
Income tax expense                                                                   (30 344)     (47 494)     (71 428)
Profit for the period                                                                 82 565       54 787      132 446
Profit attributable to:
Preference shareholders                                                                7 441        7 682       15 531
Non-controlling interest                                                                 648        1 046        1 981
Equity holders of the Group                                                           74 476       46 059      114 934
Profit for the period                                                                 82 565       54 787      132 446
Earnings per ordinary share (cents)                                                   231.31       144.08       358.68
Diluted earnings per ordinary share (cents)                                           231.31       144.08       358.68

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 December 2018
                                                                                              31 December  31 December  30 June
                                                                                                     2018         2017     2018
                                                                                                Unaudited    Unaudited  Audited
                                                                                                    R'000     Restated    R'000
                                                                                                                 R'000
Profit for the period                                                                              82 565       54 787  132 446
Other comprehensive income for the period, net of income tax                                        8 390      (10 418)   9 741
Items that may be subsequently reclassified to profit and loss:
Foreign exchange differences on  translation of foreign operation                                   8 390      (10 418)   9 741


Total comprehensive income  for the period                                                         90 955       44 369  142 187
Total comprehensive income  attributable to:
Preference shareholders                                                                             7 441        7 682   15 531
Non-controlling interest                                                                              648        1 046    1 981
Equity holders of the Group                                                                        82 866       35 641  124 675
Total comprehensive income  for the period                                                         90 955       44 369  142 187

HEADLINE EARNINGS RECONCILIATION
for the six months ended 31 December 2018


                                                                                    31 December  31 December  30 June
                                                                                           2018         2017     2018
                                                                                      Unaudited    Unaudited  Audited
                                                                                          R'000     Restated    R'000
                                                                                                       R'000
Earnings are determined as follows:
Earnings attributable to equity holders  of the Group                                    74 476       46 059  114 934
Headline adjustable items                                                                 6 055        4 308    7 218
Goodwill and Intangible asset impairments - IAS 38                                        6 055        4 308    6 902
Gross                                                                                     6 055        5 833    9 436
Tax Impact                                                                                    -       (1 525)  (2 534)
Investment Property Fair value adjustments - IAS 40                                           -            -      310
Gross                                                                                         -            -      400
Tax impact                                                                                    -            -      (90)
Profit on sale of property and equipment - IAS 16                                             -            -        6
Gross                                                                                         -            -        9
Tax impact                                                                                    -            -       (3)


Headline earnings                                                                        80 531       50 367  122 152
Headline earnings per ordinary  share (cents)                                            250.12       157.56   381.21

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 December 2018
                                                          31 December  31 December      30 June
                                                                 2018         2017         2018
                                                            Unaudited    Unaudited      Audited
                                                                R'000     Restated        R'000
                                                                             R'000
Opening total shareholders' equity                          1 741 771    1 659 225    1 659 225
Change in accounting policy (IFRS 9)                          (87 968)           -            -
Restated total equity at the beginning of  the period       1 653 803    1 659 225    1 659 225
Total comprehensive income for the period                      90 955       44 369      142 187
Profit for the period                                          82 565       54 787      132 446
Foreign currency translation reserve                            8 390      (10 418)       9 741
Transactions with owners recorded  directly in equity
Sale of Treasury Shares                                             -       22 938       22 939
Preference share dividend                                      (7 441)      (7 682)     (15 531)
Ordinary share dividend                                       (33 607)     (50 933)     (67 049)
Closing balance                                             1 703 710    1 667 917    1 741 771

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 31 December 2018
                                                          31 December  31 December      30 June
                                                                 2018         2017         2018
                                                            Unaudited    Unaudited      Audited
                                                                R'000     Restated        R'000
                                                                             R'000
Cash flows from operating activities                           63 935       85 076      201 165
Movement in operating assets and liabilities                 (749 266)    (128 272)     802 743
Net cash flows from operating activities                     (685 331)     (43 196)   1 003 908
Net cash flows from investing activities                      (90 224)     (34 900)  (1 281 352)
Net cash flows from financing activities                            -       22 939       22 939
Net decrease in cash and cash equivalents                    (775 555)     (55 157)    (254 505)
Cash and cash equivalents at the beginning of the period    1 892 167    2 165 379    2 165 379
Effect of exchange rate fluctuations on cash held              (3 615)        (216)     (18 707)
Cash and cash equivalents at the end of the period          1 112 997    2 110 006    1 892 167

CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS
for the six months ended 31 December 2018

                                                                   31 December  31 December     30 June
                                                                          2018         2017        2018
                                                                     Unaudited    Unaudited     Audited
                                                                         R'000     Restated       R'000
                                                                                      R'000
Segment Revenue
Banking pillar                                                         402 782      370 515     760 829
Capital pillar                                                          49 224       58 047     168 250
Wealth pillar                                                          156 420      144 816     288 849
Wealth excluding fair value adjustments to  strategic investments      147 732      144 010     294 883
Fair value adjustments to strategic investments                          8 688          806      (6 034)
Group and inter-segment eliminations                                       128        1 901       1 288
Total segment revenue                                                  608 554      575 279   1 219 216
Segment profit
Banking pillar                                                          58 108       35 644      68 946
Capital pillar                                                          (1 039)      (3 494)     39 182
Wealth pillar                                                           25 780       23 801      30 517
Wealth excluding fair value adjustments to  strategic investments       19 038       23 064      35 199
Fair value adjustments to strategic investments                          6 742          737      (4 682)
Group and inter-segment eliminations                                      (284)      (1 164)     (6 199)
Profit for the period                                                   82 565       54 787     132 446
Segment Assets
Banking pillar                                                      11 614 114   11 000 508  12 143 177
Capital pillar                                                         568 998      724 825     684 310
Wealth pillar                                                        1 492 455    1 581 895   1 636 775
Group and inter-segment eliminations                                  (103 500)    (147 785)   (145 178)
Total segment assets                                                13 572 067   13 159 443  14 319 084
Segment Liabilities
Banking pillar                                                      10 418 604    9 962 777  11 010 328
Capital pillar                                                         306 647      300 153     297 789
Wealth pillar                                                        1 259 389    1 388 920   1 419 313
Group and inter-segment eliminations                                  (116 283)    (160 324)   (150 117)
Total segment liabilities                                           11 868 357   11 491 526  12 577 313

SELECT EXPLANATORY NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The Condensed Interim Consolidated Financial Statements comprise the following:
- Consolidated Statement of Financial Position
- Consolidated Income Statement
- Condensed Consolidated Statement of Comprehensive Income
- Condensed Consolidated Statement of Changes in Equity
- Condensed Consolidated Statement of Cash Flows
- Condensed Consolidated Segmental Analysis

at and for the period ended 31 December 2018.

These Condensed Interim Consolidated Financial Statements have been prepared under the supervision of Angela Pillay, CA(SA), Group and Bank Financial Director.

BASIS OF PREPARATION AND PRESENTATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2018

The Condensed Interim Consolidated Financial Statements have been prepared in accordance with and containing the information required by IAS 34: Interim Financial Reporting, as well as the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings
Requirements, and the requirements of the Companies Act, 2008 (Act No. 71 of 2008) of South Africa (Companies Act).

The accounting policies applied in these unaudited, Condensed Interim Consolidated Financial Statements for the period ended 31 December 2018 are in terms of International Financial
Reporting Standards (IFRS) and are the same as those applied in the Group's Audited Consolidated Annual Financial Statements at the year ended 30 June 2018, apart from the adoption of
IFRS 9 Financial Instruments (IFRS 9). IFRS 9 is effective for the Sasfin Group from 1 July 2018 and has replaced IAS 39 Financial Instruments: Recognition and Measurement (IAS 39).

As permitted by IFRS 9, the Group has elected to adopt IFRS 9 retrospectively without restating comparatives, i.e. the cumulative impact of the adoption of IFRS 9 has been recognised as a
restatement of the opening retained income on 1 July 2018. Refer note 1.1 below for further information on the adoption of IFRS 9.

Note 1: Financial assets and financial liabilities

Note 1.1: Impact of adoption of IFRS 9 Financial Instruments
The main differences between IFRS 9 and IAS 39 are:
- Changes to the classification and measurement of financial assets and financial liabilities. The classification and measurement of financial assets and financial liabilities are determined
  by the business model applied by Sasfin in managing its financial assets and financial liabilities, as well as the contractual cash flow characteristics of these;
- Moving from an incurred loss impairment model under IAS 39, to an expected credit loss (ECL) impairment model under IFRS 9; and
- Changes in the hedge accounting requirements and the application thereof.

Note 1.1.1: Classification and measurement

As indicated in the below table, the changes to the classification and measurement of financial assets and financial liabilities did not have a significant impact on the Group.

                                                                                                                       IFRS 9 Transition adjustment     
                                                                                                                                on 1 July 2018
                                                IAS 39 Classification  IFRS 9 Classification      IAS 39            ECL         Classification       Total      IFRS 9
                                                                                                 30 June          R'000                    and      IFRS 9      1 July
                                                                                                    2018                              Measure-  Adjustment        2018
                                                                                                   R'000                                 ments       R'000       R'000
                                                                                                                                         R'000

ASSETS
Cash and cash balances                          Amortised  cost        Amortised  cost         1 892 167              -                      -           -   1 892 167
Negotiable securities                           Amortised  cost        Amortised  cost         1 975 407              -                      -           -   1 975 407
Loans and advances                              Amortised  cost        Amortised  cost         7 618 495       (114 671)                     -    (114 671)  7 503 824
Trading assets                                  FVTPL                  FVTPL                   1 476 511              -                      -           -   1 476 511
Other  receivables                              Amortised  cost        Amortised  cost           375 380              -                      -           -     375 380
Investment securities                                                                            628 493              -                      -           -     628 493
Private Equity and Property Equity investments  FVTPL                  FVTPL                     586 497              -                      -           -     586 497
Strategic investments                           FVTPL                  FVTPL                      41 996              -                      -           -      41 996
Property, plant  and equipment                  Outside  scope         Outside  scope             88 206              -                      -           -      88 206
Investment property                             Outside  scope         Outside  scope             12 600              -                      -           -      12 600
Taxation                                        Outside  scope         Outside  scope             19 809              -                      -           -      19 809
Intangible assets and goodwill                  Outside  scope         Outside  scope            201 448              -                      -           -     201 448
Deferred tax  asset                             Outside  scope         Outside  scope             30 568         26 703                      -      26 703      57 271
TOTAL ASSETS                                                                                  14 319 084        (87 968)                     -     (87 968) 14 231 116
                                    
LIABILITIES
Funding under repurchase agreements 
 and interbank                                  Amortised  cost        Amortised  cost        1 924 975               -                      -           -   1 924 975
Deposits from customers                         Amortised  cost        Amortised  cost        4 449 344               -                      -           -   4 449 344
Debt securities issued                          Amortised  cost        Amortised  cost        3 115 432               -                      -           -   3 115 432
Long-term  loans                                Amortised  cost        Amortised  cost          674 616               -                      -           -     674 616
Trading liabilities                             FVTPL                  FVTPL                  1 449 203               -                      -           -   1 449 203
Other  payables                                 Amortised  cost        Amortised  cost          801 745               -                      -           -     801 745
Taxation                                        Outside  scope         Outside  scope            21 819               -                      -           -      21 819
Deferred tax liability                          Outside  scope         Outside  scope           140 179               -                      -           -     140 179
TOTAL LIABILITIES                                                                            12 577 313               -                      -           -  12 577 313
EQUITY             
Ordinary share capital                          Outside  scope         Outside  scope               321               -                      -           -         321
Ordinary share premium                          Outside  scope         Outside  scope           166 945               -                      -           -     166 945
Reserves                                        Outside  scope         Outside  scope         1 382 185         (87 968)                     -     (87 968)  1 294 217
Preference share capital                        Outside  scope         Outside  scope                18               -                      -           -          18
Preference share premium                        Outside  scope         Outside  scope           188 068               -                      -           -     188 068
Non-controlling interest                        Outside  scope         Outside  scope             4 234               -                      -           -       4 234
TOTAL EQUITY                                                                                  1 741 771         (87 968)                     -     (87 968)  1 653 803
TOTAL LIABILITIES AND EQUITY                                                                 14 319 084         (87 968)                     -     (87 968) 14 231 116

Note 1.1.2: Expected credit loss impairment model

The Group has elected not to apply the simplified approach to its finance lease receivables.

The allowance account for credit losses is determined with reference to the following:
- Stage 1: 12-month expected credit losses for those financial assets where there has not been a                         
  significant increase in credit risk since initial recognition.
- Stage 2: Lifetime expected credit losses for those financial assets where there has been a significant                         
  increase in credit risk on a collective basis.
- Stage 3: Lifetime expected credit losses for those financial assets where there has been a significant                         
  increase in credit risk on an individual basis.

A significant increase in credit risk is assumed for all financial assets with contractual payments past due by 30 days or more. It also considers the impact of forward-looking economic
information that is readily available and where relevant.

The change from an incurred loss model under IAS 39 to an ECL model under IFRS 9 resulted in an increase in the impairment loss allowance account (i.e. provision for credit losses) of
R114.671m, with a deferred tax impact of R26.703m on 1 July 2018. Management has applied assumptions, judgements and estimates in developing the ECL model, based on historical experience
and other factors that are believed to be reasonable.

Impairment loss allowance for loans and advances under IAS 39 on 30 June 2018:

                           Portfolio  Special      Sub-  Doubtful     Loss    Total
                               R'000  mention  standard     R'000    R'000    R'000
                                        R'000     R'000
Equipment Finance             41 859    4 851     1 509    11 530  189 436  249 186
Capital Equipment Finance      1 102      955         -         -      169    2 226
Trade and Debtor Finance       8 178    2 607         -         -   14 261   25 045
Other secured loans                -      164         -         -    9 143    9 307
                              51 139    8 577     1 509    11 530  213 009  285 764

Impairment loss allowance for loans and advances and guarantees under IFRS 9 on 1 July 2018:

                             Stage 1  Stage 2   Stage 3     Total
                               R'000    R'000     R'000     R'000
Equipment Finance             49 585   49 361   197 495   296 441
Capital Equipment Finance     15 081       78     8 533    23 692
Trade and Debtor Finance      22 195   10 041    28 829    61 065
Other secured loans            8 589        -     9 308    17 897
Guarantees                     1 340        -         -     1 340
                              96 790   59 480   244 165   400 435

Note 1.1.3: Hedge accounting

The Group currently does not apply hedge accounting and hence the implementation of IFRS 9 did not have any impact in this regard.

Note 1.1.4: Regulatory Capital

The consequential impact of the IFRS 9 implementation on Sasfin's capital adequacy levels is a reduction of 20 bps, from 15.136% to 14.937%.

The Group did not to apply the three-year transitional period that was allowed in terms of Directive 5 of 2017, given the strong capital (CET 1) position of Sasfin.

                              30 June    01 July  31 December
                                 2018       2018         2018
                               IAS 39     IFRS 9       IFRS 9
                                R'000      R'000        R'000
Available Capital
Common Equity Tier 1 (CET)  1 361 921  1 274 510    1 344 935
Tier 1                      1 437 154  1 349 744    1 420 169
Total Capital               1 469 072  1 458 297    1 499 081
Risk-Weighted assets
Credit Risk                 6 118 268  6 175 475    6 175 791
Counterparty credit risk      140 413    140 413      137 175
Market risk                   162 594    162 594      204 640
Operational risk            1 492 193  1 492 193    1 441 795
Other risk                  1 792 127  1 792 127    1 137 491
TOTAL RISK WEIGHTED ASSETS  9 705 595  9 762 802    9 096 892
Capital ratios                      %          %            % 
Common equity tier 1 (CET)     14.032     13.055       14.785
Tier 1                         14.807     13.825       15.612
Total capital                  15.136     14.937       16.479

Note 1.2: Fair values of financial assets and financial liabilities

The Group's financial risk management objectives and policies are consistent with those disclosed in the Consolidated and Separate Annual Financial Statements at and for the period ended
30 June 2018.

FINANCIAL HIERARCHY

The table below analyses financial instruments carried at fair value by level of fair value hierarchy. The different levels are based on the inputs used in the calculation of fair value of
the financial instruments. The levels have been defined as follows:

Level 1 - fair value is based on quoted market prices (unadjusted) in active markets for identical instruments.
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 - unobservable inputs for the asset or liability.

                               Level 1  Level 2  Level 3  31 December  31 December    30 June
                                 R'000    R'000    R'000         2018         2017       2018
                                                            Unaudited     Restated    Audited
                                                                R'000    Unaudited      R'000
                                                                             R'000
Financial assets             1 128 840   85 579  622 019    1 836 438    2 065 517  2 105 004
Investment securities              263        -  622 019      622 282      554 552    628 493
Trading assets               1 128 577   85 579        -    1 214 156    1 510 965  1 476 511
Financial liabilities        1 170 269   62 131        -    1 232 400    1 552 340  1 449 203
Trading liabilities          1 170 269   62 131        -    1 232 400    1 552 340  1 449 203
Non-financial assets                 -        -   11 400       11 400       19 500     12 600
Non-current assets for sale          -        -        -            -       19 500          -
Investment property                  -        -   11 400       11 400            -     12 600

Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial
instruments the Group determines fair values using valuation techniques.

The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the transfer has occurred. There were no transfers between
Level 1,2 and 3 of the fair value hierarchy for the period ended 31 December 2018.

                                             31 December  31 December   30 June
                                                    2018         2017      2018
                                               Unaudited    Unaudited   Audited
                                                   R'000        R'000     R'000
Level 3 fair values - investment securities
Opening balance                                  586 190      446 954   446 954
Total gains or losses in profit or loss           16 776        6 761    70 451
Acquisition of investments                        34 320        7 000   107 096
Disposal of investments                                -      (27 225)   (4 700)
(Repayments)/Advances                            (11 348)      73 446   (33 611)
Transfer to equity accounted associate            (3 879)           -         -
Closing balance                                  622 019      506 936   586 190

The valuations of Level 2 and Level 3 Investment Securities were based predominantly on detailed discounted cash flow methodology, which were sanity checked against implied price/earnings
multiples, and where applicable benchmarked to proxies of listed entities in similar industries. This valuation methodology is allowed per the South African Venture Capital and Private
Equity guidelines.

Note 2: Changes in the composition of the Group

During the period under review, the Group has increased its shareholding in Efficient Group Ltd (Efficient) from 14.28% to 28.96%, which gives it significant influence over this
investment. Consequently, this investment has been equity accounted in accordance with IAS 28 Investments in Associates and Joint Ventures from the effective date of the increased
shareholding.

On 1 April 2018 the Group acquired the business of Absa Technology Finance Solutions (Pty) Ltd (ATFS). Details of this acquisition were disclosed in note 38 of the Group's Annual Financial
Statements for the year ended 30 June 2018. The Group has 12 months from the acquisition date in which to finalise the purchase price allocation of the acquisition. This is currently being
completed and will be disclosed in the Group's Annual Financial Statements for the year ended 30 June 2019.

Note 3: Post balance sheet events

There are no material events subsequent to 31 December 2018 to report.

Note 4: Re-classifications and correction of prior period errors

Consistent with the Group's restatement in the Annual Financial Statements for the year ended 30 June 2018, the below restatements were made to the December 2017 comparative interim
information.

Note 4.1: Re-classification of certain assets and liabilities

During the financial year ended 30 June 2018, the Group re-assessed the nature of the items included in Other receivables and Other payables to better align the underlying items with the
business model of the Group. Based on this assessment, certain items were re-classified from Other Receivables to Trading Assets and from Other payables to Trading liabilities. These re-
classifications are disclosed in the table below. The re-classifications did not have any impact on the retained earnings or the profit for the period.

Note 4.2: Re-classification correction

Management reviewed the nature of the detailed accounts included in the respective asset and liability line items on the face of the Statement of Financial Position. As part of this
review, management identified that certain accounts were linked to the incorrect line items on the face of the Statement of Financial Position. Consequently, re-classifications were made
between Cash and cash balances, Funding under repurchase agreements and interbank as well as Deposits from customers. These re-classifications are disclosed below. The re-classifications
did not have any impact on the retained earnings or the profit for the period.

Note 4.3: Correction of prior year error - offsetting of interdivisional balances

Whilst performing the consolidation procedures for June 2018, management determined that not all interdivisional interest, deposits and bank accounts held by divisions of Sasfin Bank
Limited, with Sasfin Bank Limited, had been offset appropriately in the Consolidated Financial Statements of the Group at 30 June 2017. This error did not occur in the Consolidated
Statement of Financial Position at 31 December 2017. The correction did not have any impact on the retained earning or the profit for the period. Hence there is no impact on the basic
and diluted earnings per share, or on headline earnings per share.

Note 4.4: Correction of prior period error: Consolidation of Sunlyn (Pty) Ltd
Sunlyn (Pty) Ltd (Sunlyn) was established as an originator of the Group to obtain equipment lease rentals. Sunlyn is 100% legally owned by Innovent Investment Holdings (Pty) Ltd, in which
the Group has a 33.6% shareholding. Given the nature of the origination business, the operations of Sunlyn gradually integrated into the Group. Furthermore, the manner in which the
acquisition of the ATFS business was structured (Sunlyn being the purchaser), is evidence that the Group has power to direct the operations of Sunlyn, which contributes to the income of
the Group. Sunlyn is therefore considered to be controlled by the Group and has been consolidated. Sunlyn has been consolidated by the Group from 2018 since the impact on the consolidated
prior year numbers is immaterial. The impact of the consolidation on the condensed consolidated December 2017 interim results, as previously reported, is disclosed in the table below.

Note 4.5: Impact on financial statement line items

                                                                                                                      31 December 2017
                                                                                             As   Reclassi-   Reclassi-             Prior         Prior   Restated
                                                                                     previously    fication    fication            period        period      R'000
                                                                                       reported   Increase/  correction             error  Sunlyn error
                                                                                          R'000  (Decrease)   Increase/         Increase/     Increase/
                                                                                                      R'000  (Decrease)        (Decrease)    (Decrease)
                                                                                                                  R'000             R'000         R'000
Statement of  financial position
Assets
Cash and cash balances                                                                2 102 686           -       7 320                 -             -  2 110 006
Trading assets                                                                        1 317 424     193 541           -                 -             -  1 510 965
Other receivables                                                                       648 622    (193 541)          -                 -             6    455 087
Taxation                                                                                 27 681           -           -                 -            63     27 744
Private equity and property equity investments                                          507 246           -           -                 -             3    507 249
Property, plant and equipment                                                            95 443           -           -                 -           174     95 617
Liabilities
Funding under repurchase agreements                                                   
and interbank                                                                         1 267 180           -     (91 487)                -             -  1 175 693
Trading liabilities                                                                   1 337 250     215 090           -                 -             -  1 552 340
Other payables                                                                          984 876    (215 090)          -                 -         5 867    775 653
Deposits from customers                                                               4 246 264           -      98 807                 -        (5 497) 4 339 574
Statement of comprehensive
Income
Interest income                                                                         624 124           -           -            (4 972)           17    619 169
Interest expense                                                                       (394 866)          -           -             4 972             -   (389 894)
Non interest income excluding fair value adjustments to strategic investments           347 975           -           -                 -        (2 777)   345 198
Staff costs                                                                            (194 337)          -           -                 -       (24 679)  (219 016)
Other operating expenses                                                               (207 517)          -           -                 -        27 315   (180 202)
Statement of cash flows
Movement in operating assets and liabilities                                           (100 108)          -      12 993           (41 157)            -   (128 272)
Cash and cash equivalents  at beginning of the period                                 2 129 896           -      (5 674)           41 157             -  2 165 379
Cash and cash equivalents  at the end of the period                                   2 102 686           -       7 320                 -             -  2 110 006
                                                                                                                         
                                                                                                              31 December 2017                                    
                                                                                                                     Prior              
                                                                                                                    period                
                                                                                                         As   Sunlyn error                       
                                                                                                 previously       Increase/                               
                                                                                                   reported      (Decrease)      Restated                         
Basic and diluted earnings per share (cents)                                                         144.47       (0.39)           144.08
Headline and diluted headline earnings per share (cents)                                             157.95       (0.39)           157.56

COMMENTARY

NATURE OF BUSINESS

Sasfin Holdings Limited (Sasfin) and its subsidiaries provide a comprehensive range of specialist financial products and services to enable growth in the businesses and global wealth of
our clients.

BUSINESS ENVIRONMENT

Global

Global markets over the past 12 months have been characterised by pressured US equity markets, partially as a result of rising US interest rates, a continued slowdown in Europe underpinned
by the uncertainty around Brexit and moderate Chinese growth.

South Africa

The South African economy has continued to underperform the rest of the world, facing several of its own challenges, with its economic growth outlook having weakened since the 2018
medium-term budget. On the back of a fragile recovery in household spending and moderate fixed investment spending, National Treasury had to revise its GDP growth expectations down to 1.5%
for 2019, from its previous estimate of 1.8% in the 2018 National Budget.

The deteriorating fiscal situation is aggravated further by the increasing liabilities associated with under-performing State-Owned Entities (SOEs) - particularly Eskom. The SOEs'
financial and operational underperformance has limited fixed investment projects and uncertain property rights weighs negatively on business and investor confidence. In addition, in this
reporting period, the South African Reserve Bank (SARB) increased the repo rate by 25 bps to 6.75%.

REPORTING ADJUSTMENTS IN 2018

Certain restatements and adjustments were made and reported on at June 2018 which had no impact to the Statement of Comprehensive Income or Statement of Changes in Equity. This has led to
restated December 2017 interim comparative numbers in the Statement of Financial Position.

IFRS 9 Financial Instruments (IFRS 9) became effective for the Group from 1 July 2018. The Group has, as permitted by IFRS 9, elected not to restate its comparative financial information.
Therefore, the comparative financial information has been prepared on an IAS 39 Financial Instruments: Recognition and Measurement (IAS 39) basis. The impact of adopting IFRS 9 has been
applied retrospectively with an adjustment to the Group's opening 1 July 2018 reserves.

FINANCIAL PERFORMANCE

The Group posted a 59.89% growth in headline earnings to R80.531 million (December 2017: R50.367 million) with an increase in headline earnings per share of 58.75% to 250.12 cents
(December 2017: 157.56 cents). This positive growth is primarily due to an improved credit loss ratio to 123bps (December 2017: 200bps) and a normalisation in the tax expense to R30.344
million (December 2017: R47.494 million). Total income grew marginally by 5.78% in a subdued economy. Costs grew by 12.31% due to an increase in headcount as a result of the Absa
Technology Finance Solutions (ATFS) acquisition, continued investment in the business and an increase in bonus provisions. The Group's cost-to-income ratio deteriorated to 73.96% (December
2017: 70.40%) as a result of these increases in costs and also due to lower returns on Treasury assets.

Over the past two years, the Group expressed concern around the deteriorating performance of its credit book and subsequently took significant steps to improve its credit processes and
team. The result has been an improvement in the credit loss ratio as well as an improved credit coverage ratio.

FINANCIAL AND CAPITAL POSITION

Total assets grew by 3.14% to R13.572 billion (December 2017: R13.159 billion) with gross loans and advances growing by 8.72%, largely off the back of the acquisition of ATFS, even though
post June 2018 there has been, as expected, a reduction in gross loans and advances as the ATFS book matures.

Funding grew by 7.80% to R9.911 billion which resulted in a healthy cash position of R1.113 billion, and near cash in the form of negotiable securities grew by 71.02% to R2.762 billion, to
optimise the Group's capital adequacy ratio (CAR) following the day one impact of the IFRS 9 adjustment. The maturity profile of the funding base has been lengthened to meet the net stable
funding ratio requirements, ensuring that both the liquidity coverage and net stable funding ratios remain above regulatory requirements. Group capital decreased by 4.09% to R1.499 billion
following the day one impact of the IFRS 9 adjustment resulting in the CAR decreasing to 16.479%. The Group maintains a total Tier 1 capital ratio of 15.612%.

SEGMENTAL OVERVIEW

Banking

The Banking Pillar was impacted most significantly by the improved impairments, resulting in an increase in profit after tax to R58.108 million (December 2017: R35.644 million). The gross
loans and advances book grew by 9.95% to R7.339 billion. This is due in part to the acquisition of the ATFS rental finance book and growth in capital equipment finance.

The coverage ratio improved significantly from 3.88% to 5.46% due to the impact of IFRS 9 on the provisions.

The Bank CEO for the reporting period, Mr Roland Sassoon, stepped down with effect from 31 December 2018 after nearly 50 years of service to Sasfin. His role was assumed by Michael
Sassoon, the Sasfin Group CEO.

Wealth

The Wealth Pillar showed a 8.31% growth in profit after tax to R25.780 million (December 2017: R23.801 million) largely due to increased foreign income (22.93%), institutional asset
management fees and income from our strategic investments. This was offset by underperforming equity markets, lower brokerage volumes as well as the volatility in the rand negatively
impacting the fixed income business. The Wealth Pillar's share of associate income was largely due to its investments in the Efficient Group and Direct Market Access (previously Saxo
Capital Markets South Africa). Sasfin increased its investment in Efficient (now at 28.96% from 14.28% previously) resulting in Efficient being classified as an Associate. The investment
in Efficient was previously held as a fair value through profit or loss strategic investment and from the effective purchase date, is equity accounted.

Assets under Management and Advice (excluding under Administration) decreased by 5.57% to R37.219 billion (December 2017: R39.413 billion) largely in line with the equity markets which
saw a sharp decline specifically towards the latter half of 2018. Low revenue yielding Assets under Administration decreased by 19.31% to R50.349 billion (December 2017: R62.401
billion).

Capital

The Capital Pillar showed an improved loss after tax of R1.039 million (December 2017: R3.494 million) largely due to an improved tax expense position resulting from the prior year once
off charge.

Sasfin Capital is increasingly offering debt solutions to business clients and we see good opportunities to further scale this business in a capital efficient way which should result in
more stable earnings from this area in the medium term.

PROSPECTS

Our purpose is to contribute to society by going beyond a bank to enable growth in the businesses and global wealth of our clients. The South African economy critically needs growth in
savings and investment from households and growing entrepreneurial businesses. Sasfin is well placed to deliver value to its business and wealth clients through its excellent solution-
orientated team and wide range of products and services which are increasingly supported by technology enhancements.

We invested heavily in developing our capabilities within each of our key strategic focus areas over the last few years. This investment, together with increased regulatory costs,
negatively impacted our cost-to-income ratio. Given this investment and considering the challenging economy, we are well positioned for growth in each of the markets in which we operate.

We continue to refine Sasfin's value proposition and are strengthening our distribution capabilities to our five primary client segments, aligned with our five-year strategy.

Small business

Through B\\YOND, our digital business banking platform, we support small businesses which will ultimately help grow our depositor base, diversify our client base and increase our non-
interest income. B\\YOND was enhanced to create an intuitive user experience, including where there are multiple users of a single bank account or a single user with multiple bank
accounts. Further upgrades in 2019 will include incorporating credit and foreign exchange into the platform.

We continue to invest in aligned fintech businesses which further support our client proposition. We also leveraged B\\YOND by entering into an alliance banking relationship with Hello
Paisa (part of the Hello Group) whereby digital banking services will be offered to the previously unbanked or underserved. While the B\\YOND programme remains in the investment cycle, the
rate of investment is now stable and there was more than a 50% growth in revenue year on year, albeit off a low base.

Medium business

Many South African businesses are facing cash flow crises with a growing number going into business rescue and liquidation due to the challenging economic conditions in the last few years.
However, there are many of these businesses, that with the right funding structures and working capital solutions, are well positioned to grow. We therefore strengthened our Business
Banking and Capital teams and solutions to support this segment of the economy. We remain confident of our ability to grow our business in this client segment, within appropriate risk
levels, in the medium term.

Asset suppliers

Asset finance, which was traditionally dominated by office automation suppliers, is seeing new equipment and asset types which require rental and capital equipment finance solutions. Our
team and offering were expanded by the ATFS and Fintech acquisitions, and we launched LeaseWave, a state-of-the-art core line of business system, which will enhance our client experience
and efficiencies. Asset finance is currently the biggest contributor to the Group and we are giving this segment renewed focus as we expect further growth.

Private clients

We exceeded R10bn of offshore assets under management in 2018 and expect further growth. While local markets have been challenging, there are good growth prospects in our offshore
offering. Our investment solutions are performing well, and we continuously streamline operations to improve client experience. Through some expansion of our product offering and increased
investment in distribution, we are well positioned to further grow our clients' global wealth.

Institutional clients

Our balanced funds and income funds are performing well relative to our peers and we are engaging in transformation initiatives in this client segment. Our team's track record and
investment solutions, combined with our improved empowerment score of Sasfin Asset Managers (Pty) Ltd (SAM), places us in a strong position to grow institutional assets under management.
In addition, our work in the asset consulting unit - where we recently launched the Sasfin Umbrella Retirement Fund - has resulted in compelling offerings to pension funds and corporates.

We will continue investing in this client segment as we are well placed to manage significantly more assets.

Post the half-year, SAM, a wholly owned subsidiary of Sasfin Wealth (Pty) Ltd, won two coveted Raging Bull Awards for its Flexible Income Fund. In addition, and post the reporting period,
SAM achieved a B-BBEE Level 1 status. SAM's B-BBEE status underscores Sasfin's overall commitment to transformation, one of the Group's strategic focus areas.

INTERIM PREFERENCE SHARE CASH DIVIDEND

The Directors have declared a gross cash preference dividend number 29 of 418.09 cents per share (December 2017: 427.42 cents per share) ("preference dividend") for the period 1 July 2018
to 31 December 2018.

Preference dividends have been paid on 1 000 000 (December 2017: 1 000 000) preference shares issued at R100.00 (December 2017: R100.00) each, and on 797 226 (December 2017: 797 226)
preference shares issued at R110.49 (December 2017: R110.49) each.

The following further information is provided to shareholders with regards to the preference dividend declaration in respect of the dividends tax:
- The dividend has been declared from income reserves;
- The dividend withholding tax rate is 20%, and a net dividend of 334.47200 cents (December 2017: 341.93600 cents) per share is paid to those shareholders who are not exempt from dividend
  withholding tax;
- The issued number of preference shares as at the declaration date is 1 797 226 (December 2017: 1 797 226); and
- The income tax reference number is 9300/204/71/7.

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 2019.

The salient dates relating to the preference dividend are as follows:

Last day to trade cum the preference dividend
Tuesday, 2 April 2019

Preference shares commence trading ex the preference dividend
Wednesday, 3 April 2019

Preference dividend record date
Friday, 5 April 2019

Payment date of preference dividend
Monday, 8 April 2019

Preference share certificates may not be dematerialised or rematerialised between Wednesday, 3 April 2019 and Friday, 5 April 2019, both days inclusive.

INTERIM ORDINARY SHARE CASH DIVIDEND

In line with the growth aspirations of the Group and the changing regulatory landscape (including the implementation of IFRS 9), the Board has adopted a dynamic dividend policy.

The Directors have declared an interim ordinary share cash dividend for the period ended 31 December 2018 of 49.862 cents (December 2017: 46.894 cents) per share.

The ordinary dividend is payable to holders of ordinary shares recorded in the register of the Company at the close of business on Friday, 12 April 2019.

The following further information is provided to shareholders with regards to the interim dividend declaration in respect of the dividends tax:
- The dividend has been declared from income reserves;
- The dividend withholding tax rate is 20%, and a net dividend of 39.88960 cents (December 2017: 37.51520 cents) per share is paid to those shareholders who are not exempt from dividend
  withholding tax;
- The issued number of ordinary shares as at declaration date is 32 301 441 (December 2017: 32 301 441); and
- The income tax reference number is 9300/204/71/7.

The salient dates relating to the ordinary dividend are as follows:

Last day to trade cum the ordinary dividend
Tuesday, 9 April 2019

Ordinary shares commence trading ex the ordinary dividend
Wednesday, 10 April 2019

Ordinary dividend record date
Friday, 12 April 2019

Payment date of ordinary dividend
Monday, 15 April 2019

Ordinary share certificates may not be dematerialised or rematerialised between Wednesday, 10 April 2019 and Friday, 12 April 2019, both days inclusive.

The above dates and times are subject to amendment. Any such amendment will be released on SENS and published in the press.

CORPORATE DETAILS

Independent Non-Executive Chair
Roy Andersen

Executive Directors
Michael Sassoon (Chief Executive Officer)
Roland Sassoon (Retired: 31 December 2018)
Angela Pillay (Financial Director)

Independent Non-Executive Directors
Richard Buchholz
Linda de Beer
Grant Dunnington
Gugu Mtetwa
Shahied Rylands (Lead)

Non-Independent, Non-Executive Directors
Gugu Dingaan
Shaun Rosenthal (Alternate)
Gloria Serobe

Group Company Secretary
Howard Brown

Website and email
www.sasfin.com
investorrelations@sasfin.com

Transfer Secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
PO Box 61051, Marshalltown, 2107

Sponsor
Sasfin Capital (a member of the Sasfin Group)

Independent sponsor
Deloitte & Touche Sponsor Services (Pty) Ltd

Auditors
PricewaterhouseCoopers Inc.

Registered Office
29 Scott Street, Waverley, Johannesburg, 2090
Tel: +27 11 809 7500
Fax: +27 11 887 6167/2489
Company Registration number: 1987/002097/06
Tax reference number: 9300/204/71/7

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", and "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, however, 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: 19/03/2019 10:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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