NSE rally returns Britam to half-year profit

Britam Holdings group managing director Tavaziva Madzinga. PHOTO | DIANA NGILA | NMG

Britam Holdings #ticker:BRIT has returned into half-year profit, lifted by growth in investment income and a rise in the value of shares at the Nairobi Securities Exchange (NSE) #ticker:NSE.

The financial services company posted Sh376.3 million net profit in six months to June, marking a recovery from Sh1.63 billion net loss posted in a similar period last year.

Britam, emerging from a record Sh9.11 billion net loss booked in the full year ended December 2020, hopes to continue with recovery in the second half of the year.

“As the local and regional economies recover from the effects of Covid-19 pandemic, the group is optimistic of an improved performance across our local and regional businesses in the second half of the year,” said the firm.

Net revenue from the core business of underwriting rose 2.4 percent to Sh11.97 billion, but a faster rise in investment income and gains on the value of shares Britam has invested in lifted it from the loss position.

Investment income rose 35 percent or Sh1.29 billion to Sh4.96 billion, offering support to the bottom line.

The worth of its investment in equities at the NSE posted a Sh1.37 billion gain in the six months to June, compared to a loss of Sh3.22 billion booked in the preceding similar period.

“Improved performance of investments in listed equities [was] driven by their better performance at the NSE in the period,” said Britam.

The insurer said regional general insurance business posted growth in gross earned premiums, with payments outside Kenya accounting for 24 percent of total premiums.

Britam has operations in Kenya, Uganda, Rwanda, Tanzania, South Sudan, Mozambique and Malawi.

However, earnings were impacted by a Sh3.78 billion or 25 percent rise in operating expenses, driven by increased claims payments, interest payments, and restructuring costs.

“Growth in operating expenses attributed mainly to one-off item related to the ongoing transformation of the business as the group implements its new transformation strategy,” said Britam.

In January, Britam appointed Tavaziva Madzinga, a strategy expert, as its chief executive to replace long-serving Benson Wairegi, who retired after 40 years of service.

The appointment was part of the changes as Britam introduced a leaner team of 11 managers from the previous 19, leading to the scrapping of nine executive roles.

Positions that were done away with include the principal executive director, chief of staff, group chief operating officer, corporate affairs director, commercial director, and actuary and product development manager.

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