Johannesburg, Sasfin Holdings Limited today reported a significant decline in its interim earnings for the six months ended December 31, 2023. The Group's headline earnings fell by 62.50% to R24.416 million, down from R65.102 million in the corresponding period in 2022. This decrease is primarily attributed to negative adjustments in the Group’s fair value loans and private equity portfolio, alongside an increase in credit impairments amidst a challenging economic environment.

The financial services group also observed a 7.17% drop in total income, amounting to R653.676 million, influenced by the fair value adjustments despite an increase in net interest income from its loan book. However, total costs were reduced by 5.70% to R547.700 million.

Sasfin's total assets decreased by 1.63% to R13.352 billion, while core funding saw a 3.78% increase to R9.851 billion. The Group's net asset value per ordinary share saw a modest increase of 4.09% to 5,191 cents. Despite these challenges, the capital adequacy ratio remained stable at 16.50%.

In strategic developments, Sasfin announced the disposal of its Capital Equipment Finance and Commercial Property Finance business units to African Bank Limited, a move expected to finalize by the end of the fiscal year, pending regulatory approvals. This disposal is part of Sasfin's strategy to focus on its core businesses and exit non-core activities, aiming to create surplus liquidity and a stronger capital position for the Group.

Segment-wise, the Asset Finance operating profit rose by 10.5% to R101.1 million, with the Rental Finance business maintaining its competitive and financial strength. Conversely, the Business and Commercial Banking segment recorded a loss of R58.4 million, attributed to lower non-interest income and higher credit impairment charges. Sasfin Wealth's operating profit slightly declined to R59.4 million, even as Assets under Management and Advice remained steady at R64.4 billion.

Given the economic climate and subdued financial performance, Sasfin has decided not to declare an interim dividend for this period. The Group remains committed to its strategic reset, focusing on core areas and exploring strategic options in a changing regulatory and competitive landscape.

This announcement is summarized from the full report available on Sasfin's and the JSE's website and reflects the directors' responsibility to provide an accurate overview of the company's performance.