MAVERICK BUSINESS: Investing in the future does not come cheap, but Sasfin is confident its three-pronged strategy will pay off

In a tough economy, small banks will inevitably be under pressure. Sasfin Holdings provides an example of how small banks are responding to the economic crisis by moving in new markets and improving their technology. How’s it going? It’s not easy and the risks are high, but the bank is certainly pressing forward.

But investing in the future does not come cheap. These and other investments in technology — including the acquisition of Absa Technology Finance Solutions in 2018 — saw costs grow by 12.31% for the six months to December. The Group’s cost-to-income ratio deteriorated to 73.96% . Sasfin successfully launched digital platform B\\YOND, for SMEs, in 2018 and acquired a strategic stake in fast-growing fintech lender Payabill earlier in 2019. Payabill, a 100% digital lending business, provides working capital and/or trade finance to small businesses. The collaboration between Sasfin and Payabill accelerates financing opportunities for customers.

Currently, Payabill offers loans of up to R150,000 to businesses. The intention is that with the investment made by Sasfin, Payabill will be able to offer larger loans to SMEs in the future. Smart dashboards, at-a-glance views of cash runways and the ability to tag and classify payments puts the platform streets ahead of any other banking platform in the country. Sasfin was also the first — and presently only — bank in the country that can integrate via direct feed integration — with Xero Accounting software.

The group posted a 59.89% growth in headline earnings to R80.531-million primarily due to an improved credit loss ratio to 123bps and a normalisation in the tax expense to R30.344-million . The company recovered from a disappointing performance in the previous year.While the economy remains challenging, we are confident that we are continuously improving our offering to ensure that we deliver value to our primary client segments.

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