Britam Holdings #BRTM has emerged from a loss to post an all-time high net profit of Sh3.54 billion helped by growth in insurance revenue and appreciation in value of financial assets such as shares on the Nairobi bourse #ticker:NSE.
The profit recorded in the financial year ended December 2019 is a recovery from a loss of Sh2.21 billion posted the previous year.
The latest earning is the best in the history of the diversified financial services firm. The last time it posted a net profit close to this was in 2010 when profit was at Sh2.71 billion.
Britam will be under pressure to maintain the performance, with Group managing director Benson Wairegi saying that 2020 is presenting a challenging business environment.
“There are a number of key global and regional risks that affect the group including Covid-19, locusts’ invasion and a decline in the stock market performance,” said Mr Wairegi.
“We are optimistic that there will be concerted effort to mitigate effects of these adverse developments to the economies and the world at large.”
Net earned revenue from premiums and fund management fees rose by 8.9 percent to Sh23.65 billion.
Gains on financial assets improved significantly to Sh4.78 billion in contrast with previous year’s loss of Sh3.05 billion. This was a key driver in Britam’s strong bottom-line.
The financial assets include shares listed at the Nairobi Securities Exchange (NSE), unquoted ordinary shares, government securities, corporate bonds, unit trust and investment in property funds.
The value of investment assets such as stocks, bonds and real estate, collectively rose by Sh22.9 billion or 27 percent to Sh107.8 billion.
The listed firm said that it posted improved returns from equities and fixed income investment at the NSE.
Last year, the NSE market capitalisation was up 21.44 per cent or Sh400 billion to hit Sh2.5 trillion, meaning that the value of shares was on a rise.
Britam Life Assurance, which offers life covers, posted a net profit of Sh2.54 billion from a Sh567.6 million loss. Its total income grew by 51 percent to Sh22.4 billion during this period.
However, Britam General Insurance, also part of Britam Holdings, saw its net loss widen 3.6 times to Sh185.4 million on reduced income and increased expenses.
Britam Asset Managers, another company within Britam Holdings, posted a loss of Sh124.3 million from a profit of Sh41.9 million the previous year as income dropped and expenses rose.
Assets under management grew by 55 percent to Sh227 billion during the reporting period.