Our opinion on the current state of SASFIN(SFN)Sasfin (SFN) is a banking group specializing in financing services for small businesses and high-net-worth individuals. Listed on the JSE in 1987, Sasfin has been investing in its digital platforms and making strategic acquisitions. The share had been in a long-term downward trend, with investors advised to wait for a decisive upward break through its trendline before considering further investment. The impact of COVID-19 slowed the recovery, though there have been signs of improvement recently.
On 16th October 2023, Sasfin announced that it had entered into binding agreements to sell its capital equipment finance and commercial property finance businesses to African Bank Limited. This announcement led to a sharp rise in the share price. However, on 27th February 2024, the company received a civil summons from the South African Revenue Services (SARS) for a damages claim of R4.782 billion, plus interest and penalties, related to income tax, VAT, and penalties allegedly owed by former foreign exchange clients of the bank. This legal issue has raised concerns for investors.
In its results for the year ending 30th June 2024, Sasfin reported a headline loss of 190.96c, compared to a profit of 366.18c in the previous year. The loss was attributed to an increase in expected credit losses, a decline in non-interest income due to negative fair value adjustments in the Private Equity portfolio, and a provision raised for administrative sanctions. Sasfin’s market capitalization currently stands at R484 million.
Trading in the share is relatively thin, with an average of around R85,000 worth of shares changing hands daily. On 15th July 2024, Sasfin announced its intention to delist from the JSE, offering shareholders R30 per share, which represents a 66% premium to the 30-day volume-weighted average price (VWAP) as of 12th July 2024.
However, on 16th October 2024, Business Day reported that the JSE had placed Sasfin on notice of suspension due to its failure to produce financial statements within three months of the end of its financial year. This ongoing issue adds a layer of uncertainty to the company’s outlook, and investors should approach with caution until further clarity is provided on its financial status and the outcome of the delisting process.
