Sasfin’s Michael Sassoon talks earnings, KPMG decision

JSE listed company Sasfin recently reported a 16% decrease in headline earnings, dropping to 194 million rand, with headline earnings per share at 611 cents. The group also made headlines by announcing the termination of KPMG's role as its sponsor. In an interview with CNBC Africa, Michael Sassoon, Executive Director of Sasfin Wealth, delved into the company's financial performance, future initiatives, and the decision to part ways with KPMG. Sassoon attributed the decline in earnings to various Black Swan events that impacted the company's stake in Efficient, a listed wealth and financial services group. Despite facing challenges, he expressed confidence in the performance of Efficient but acknowledged the volatility in its share price due to thin volumes. Additionally, two credit losses and a rise in costs also contributed to the flat year-on-year results. However, Sassoon emphasized the company's commitment to investing in its wealth and banking businesses, citing opportunities for growth in the medium term. In terms of future initiatives, Sassoon highlighted the Whippold investment holdings transaction, where Whippold is set to become a 25.1% shareholder in Sasfin pending final regulatory approval. He expressed optimism about the deal and Whippold's track record as an empowerment investor. Furthermore, discussions with Absa to acquire their rental finance book, ATFS, could provide Sasfin with critical mass and expand its presence in the market. Sasfin is also reorganizing its group under three pillars: wealth, banking, and capital. With a focus on SME and investor markets, the company sees significant growth potential in these areas. Notably, Sasfin aims to position itself as the bank for businesses by offering comprehensive financial services and digital engagements to entrepreneurs. One of the major announcements from the interview was Sasfin's decision to terminate KPMG as its independent sponsor and initiate a tender process for audit services. Sassoon explained that the move aimed to create segregation between the sponsor and auditor roles, in line with the evolving regulatory landscape. While acknowledging KPMG's positive contributions, he emphasized the importance of audit rotation and cited the organization's responsibility for due diligence in light of recent concerns. Despite the decision, Sassoon noted the possibility of KPMG participating in the tender process for audit services, which the company's audit committee would consider in due course. The engagement with KPMG regarding the decision reflected the company's commitment to upholding transparency and compliance standards. Regarding leadership within Sasfin, Sassoon clarified that founder and CEO Rowland still plays an active role in the business. The company recently appointed Errol Zeke as the CEO of Sasfin Wealth, allowing Sassoon to focus on broader group activities. These strategic changes aim to drive growth and innovation within Sasfin while maintaining a strong leadership structure. The developments within Sasfin reflect a dynamic approach to navigating challenging market conditions and positioning the company for future success. With a focus on strategic partnerships, digital transformation, and governance best practices, Sasfin continues to adapt to the evolving financial landscape.