Sasfin Holdings Ltd HY 2014 financial results presentation

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Information about Sasfin Holdings Ltd HY 2014 financial results presentation
Investor Relations

Published on March 14, 2014

Author: AfricanisCool

Source: slideshare.net

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Sasfin Holdings Ltd HY 2014 financial results presentation

111 March 2014 Unaudited Group Interim Results For the six month period ended 31 December 2013

211 March 2014 Welcome Roy Andersen Chairman

311 March 2014 Business and Financial Review Tyrone Soondarjee Group Financial Director

411 March 2014 Business environment • The fragile South African economy with its twin deficits, faced a challenging environment with another year of subdued economic growth. • High levels of labour unrest and unemployment across many sectors. • Quantitative easing pressures and possible sovereign downgrade. • Rand has weakened with a concomitant rise in interest rates, thereby affecting growth levels required to reduce unemployment. • The South African economy remains soft, as capital flows shift to developed economies. • Increasing concern around consumer indebtedness in a worsening credit environment. • The banking sector remains resilient, helped by the strong capital levels held by local banks.

511 March 2014 Group overview • Total assets grew by 36% to R7.4 billion, underpinned by further growth in the Business Banking division. • Loans and advances reached R3.8 billion, a 21% increase over the corresponding period of 2012. • Healthy surplus liquidity position of R2.1 billion. • Total funding base up 35% to R5.4 billion. • Deposits grew by 50% to R2.7 billion, with an improved deposit mix and maturity profile. • Headline earnings per share growth of 12% to 222 cents, with headline earnings at R70.4 million, increasing by 10%. • Total income growth of 15% for the period, driven by the Group’s increasing top-line growth initiatives and continued expansion of the non-interest revenue base.

611 March 2014 Group overview (continued) • Net interest income grew by 15% on the back of growth in loans and advances, however, was partly impacted by the negative carry costs on the high liquidity position. • Results were adversely affected by a significantly higher impairment charge which resulted in the credit loss ratio increasing to 80bps from a relatively low base in December 2012 of 40bps. • An increase in Group costs of 17% over 2012, largely due to higher staff costs, driven by growth in staff numbers due to an expanded product offering and regional footprint. • The Group’s overall cost-to-income ratio was 74%, with the Banking Group reflecting 65%.

711 March 2014 Results – key features Change Dec 2013 Dec 2012 Headline EPS (cps) 12 % 222 198 Headline earnings (Rm) 10 % 70,4 63,9 Dividends per share (cps) 9 % 65 60 Total assets (Rbn) 36 % 7.4 5.5 Gross loans and advances (Rbn) 21 % 3.8 3.2 Total funding base (Rbn) 35 % 5.4 4.0 Deposits (Rbn) 50 % 2.7 1.8 Total equity (Rbn) 6 % 1.3 1.2 Funds under advisement and management (Rbn) 35 % 77 57 Return on equity (%) - 13 13 Return on assets (%) - 2 2 Group capital adequacy (%) 500 bps 24 29

811 March 2014 Financial position Change (%) Dec 2013 (Rm) Dec 2012 (Rm) Cash & liquid assets 47 2,095 1,427 Loans & advances 21 3,724 3,070 Investment securities 19 359 301 Investment in associates 19 112 94 Property, plant and equipment 5 53 56 Financial assets held for trading 100 482 - Other assets 14 583 513 Total 36 7,408 5,461 Assets

911 March 2014 Financial position Change (%) Dec 2013 (Rm) Dec 2012 (Rm) Ordinary shareholders equity and reserves 8 1,063 985 Preference shareholders 199 199 Minority interest - 2 Total equity 6 1,262 1,186 Deposits from customers 50 2,748 1,834 Interbank funding >100 168 65 Debt securities 17 1,614 1,379 Long-term loans 28 688 538 Financial liabilities held for trading 100 465 - Other 1 463 459 Total 36 7,408 5,461 Liabilities & Equity

1011 March 2014 Financial performance Change (%) Dec 2013 (Rm) Dec 2012 (Rm) Interest income 22 293 240 Interest expense 27 (164) (129) Net interest income 15 129 111 Other income 15 292 254 Total income 15 421 365 Impairment losses >100 (16) (6) Operating expenses 17 (316) (270) Share of associated companies’ income 15 8 7 Income tax expense 11 (20) (22) Profit after tax 77 74 Non-controlling interest - 3 Preference shareholders 7 7 Headline earnings for the period 10 70 64

1111 March 2014 Segmental analysis of profit 61% 7%8% 29% 20% -25% Business Banking Capital Treasury Wealth Management Commercial Solutions Group R77m Dec 2013 65% 7% 2% 22% 23% -19% Business Banking Capital Treasury Wealth Management Commercial Solutions Group R74m Dec 2012

1211 March 2014 Loans and advances 2013 Gross Advances (Rm) 3,814 NPLs : Advances 4.2% Credit Loss Ratio p.a. 80 bps 2012 Gross Advances (Rm) 3,163 NPLs : Advances 5.3% Credit Loss Ratio p.a. 40 bps 2 445 396716 257 Equipment Rentals Capital Equipment Working Capital Finance Commercial Property & Other 64% 10%19% 7% 2 288 178 508 189 Equipment Rentals Capital Equipment Working Capital Finance Commercial Property & Other 72% 6% 16% 6%

1311 March 2014 Funding base 1 834 1,379 538 65 199 Deposits Securitisation notes Long term funding Interbank funding Preference Shares 46% 34% 13% 5% 2% 2 748 1 614688 168 199 Deposits Securitisation notes Long term funding Interbank funding Preference Shares 51% 30% 13% 3% 3% Dec 2013 Rm Dec 2012 Rm

1411 March 2014 Segmental overview • Earnings for the period of R47.3 million, albeit lower than 2012 of R48.1 million, driven by strong asset growth, margin retention and cost containment • Contribution of 61% to the Group’s profit. • Profits were adversely affected by higher credit losses • Credit loss ratio increased to 90bps from 30bps in 2012 • Outlook is positive for growth in the second half of the financial year and beyond Business Banking

1511 March 2014 Segmental overview • Marginal decrease in earnings to R5.3 million from R5.5 million in 2012 impacted by a mixed performance from the underlying portfolios • New investments for the period amounted to R18m. • Sluggish performance from Corporate Finance unit. Capital

1611 March 2014 Segmental overview • Wealth Management continues to grow and achieved an impressive set of results with profit growing by 42% to R22.1m • Increase in managed portfolios leading to improved annuity fee income. • Increased trading volumes. • Strong performance from the Asset Management business. • Acquisition of a fixed-income trading team which is contributing positively to the unit’s profit. • Funds under advisement and management of R77 billion, an increase of 35% from 2012. Wealth Management

1711 March 2014 Segmental overview • Growth in deposits, up 50% to R2.7 billion, with a lengthening of the deposit base, with notice and fixed-term deposits representing 50% of the total deposits. • Positive set of results with profit growing to R6.6m year-on-year. • Foreign exchange business is growing encouragingly, however still remains a drag on the Group’s profitability and has accordingly been transferred to the Commercial Solutions division, for renewed management attention. Treasury

1811 March 2014 Segmental overview • Satisfactory set of results with a profit for the period of R15.3 million. decreasing by 8% to the same period in 2012. • Segment is growing encouragingly and achieving scale and has become a meaningful contributor to Group earnings. Commercial Solutions

1911 March 2014 Platform for growth • Good growth in assets – strong pipeline in business and equipment finance. • Comfortable liquidity position – key enabler to support growth. • Well capitalised – leverage ratio of 15% against a minimum requirement of 4% → lever for growth. • Diversified funding lines – liability side of balance sheet solid, with growing depositor base and new channels of funding. • Investment in brand and visible presence. • Energetic leadership in key business areas. • Soon-to-be-launched Transactional Banking.

2011 March 2014 Thank You Questions?

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