Financial and banking services company Sasfin said on Monday that its earnings are likely to drop by more than 20% in the year to end-June largely due to an expected increase in impairments.
“Many of the South African businesses, where Sasfin focuses its lending activities, have been significantly impacted by Covid-19. This has resulted in lower lending volumes, a lower demand for credit, and an increase in impairments,” Sasfin said in a statement. Sasfin said it expects headline earnings per share and earnings per share to be more than 20% lower from 501c and 459.86c respectively in the prior comparable period. The company said because the IFRS9 accounting standard requires lenders to adopt a forward-looking view of the quality of their loans, Sasfin could see more impairments in June.
The company said it expects a reduction in loans and advances which will result in lower than expected income for the period.