Picture: 123RF/LANGSTRUP
Picture: 123RF/LANGSTRUP

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. 

“We have seen a significant increase in impairments since our half year results,” Sasfin said. 

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. 

At 4.52pm, its share price climbed 10.41% to R17.50. 

mjoo@businesslive.co.za

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