Sasfin swings to FY profit

Sasfin Holdings, a financial services company, has reported a return to profit for the group, signaling positive momentum amid ongoing economic recovery. CEO Michael Sassoon shared the company's success in a recent interview with CNBC Africa, highlighting the growth in income and improved credit loss ratio. The company's top line income saw an 11% increase, driven by investments in various businesses, all of which showed promising income growth surpassing pre-pandemic levels. Additionally, Sasfin witnessed a significant decrease in non-performing loans as clients demonstrated resilience and brought their accounts up to date. The credit loss ratio dropped from 303 basis points to 75 basis points, reflecting the positive impact of strong client performance and strategic credit management. While acknowledging the challenges of a fragile economy, Sassoon expressed confidence in the sustainability of Sasfin's achievements, indicating a positive outlook for the year ahead. One area of focus during the interview was Sasfin's lending book, which showed a modest 1.2% growth in gross loans and advances. Sassoon attributed this slow pace of growth to a combination of cautious credit criteria adoption and reduced client demand. Despite this, he emphasized a recent uplift in the performing book, indicating a positive trend in loan quality. Sasfin's approach to credit management has resulted in a decline in underperforming and non-performing loans, contributing to a balanced loan portfolio. In terms of deposits, Sasfin experienced a 7% decrease compared to 2020, with clients opting for cash during uncertain times. However, the company's liquidity position has strengthened, allowing for a more conservative approach to deposit acquisition. Sassoon highlighted the long-term trajectory of deposit growth and expressed optimism about attracting deposits in the future. While challenges persist, especially amid global uncertainties like new variants, Sasfin remains committed to enhancing value for its shareholders through strategic business operations. Looking ahead to the medium term, Sasfin plans to leverage its core businesses in asset finance, wealth management, and business and commercial banking to drive value accretion. The company sees opportunities in financing new asset classes, expanding its institutional asset management services, and growing its digital banking offerings for businesses. By investing in distribution channels and supporting SMEs through strategic partnerships, Sasfin aims to foster sustainable growth and support economic recovery efforts. Despite the evolving landscape, Sasfin remains focused on prudent credit management practices while capitalizing on emerging opportunities for lending and expansion.