Companies

Sanlam rules out jobs cut on Saham tie-up

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Guests follows proceedings during signing of a deal between Sanlam and a local bank. FILE PHOTO | NMG

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Summary

  • Chief Executive Oofficer Patrick Tumbo expects the integration to take up to 18 months as the company works on a seamless process to handle assets and liabilities from Saham.
  • Kenya, Rwanda and Nigeria were among the countries where Saham already had a footprint prior to the acquisition. Mr Tumbo said merging the two businesses required local regulatory approvals.
  • The Nairobi Securities Exchange-listed insurer will also have to comply with requirements from the Capital Markets Authority and the Retirement Benefits Authority.

Sanlam Kenya #ticker:PAFR says no jobs will be lost as it moves to merge with Morocco’s Saham Finances and trade under one name following the conclusion of Sh105 billion acquisition deal at group level last year.

Chief Executive Oofficer Patrick Tumbo expects the integration to take up to 18 months as the company works on a seamless process to handle assets and liabilities from Saham.

“As it is, we don’t have any member of staff earmarked for retrenchment,” said Mr Tumbo yesterday, adding that Sanlam Kenya is eying more areas of business to stabilise earnings.

Kenya, Rwanda and Nigeria were among the countries where Saham already had a footprint prior to the acquisition. Mr Tumbo said merging the two businesses required local regulatory approvals.

“We had to get nod from Competition Authority of Kenya (CAK). It has given us the green light to merge and so the process is ongoing,” he said.

“The process will take between one and one and half years because claims must be handled in a manner that does not interfere with claims payment.”

A number of mergers approved by the CAK recently have seen the competition watchdog require merging entities to take on board all employees of the target firm.

The Nairobi Securities Exchange-listed insurer will also have to comply with requirements from the Capital Markets Authority and the Retirement Benefits Authority.

Sanlam hopes that the process will save on costs by allowing it to run on one system as opposed to three while also concentrating operations at one point.

It moved its operations to Sanlam Towers late last year ending its stay at the iconic Sanlam House building on Nairobi’s Kenyatta Avenue. Both its life and general business are now operating from one point, thus cutting down on costs.

However, Sanlam Investment East Africa, a unit that handles investment decisions, will remain in Upper Hill for a while since it has a lease that is still running.

Sanlam sank into a Sh1.53 billion net loss in the six months ended June 2018 largely on writing off corporate bonds worth Sh1.15 billion. This prompted it to issue profit warning for the full year results expected in March.

According to Mr Tumbo, the insurer is set to return to profitability in the absence of this write-off and on new business partnerships.

It has inked deals for distribution of its products with major banks such as Standard Chartered Bank, Stanbic Bank, KCB, NIC, Barcalys and I & M.