Britam Holdings has returned into half-year profit, lifted by growth in investment income and a rise in shares value at the Nairobi Securities Exchange (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, which is 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 [the] Covid-19 pandemic, the group is optimistic of an improved performance across our local and regional businesses in the second half of the year," the company said.
Net revenue from the core business of underwriting rose 2.4 per cent to Sh11.97 billion but a faster rise in investment income and gains on value of shares Britam has invested in lifted it from the loss position.
The bottom line
Investment income rose 35 per cent 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," Britam said.
Regional general insurance business, the insurer said, posted a growth in gross earned premiums, with premiums outside Kenya accounting for 24 per cent of total premiums.
Britam also operates in Malawi, Mozambique, Rwanda, South Sudan Tanzania and Uganda.The bottom line was, however, hit by Sh3.78 billion or a 25 per cent rise in operating expenses, driven by increased claims, interest payments and restructuring costs."Growth in operating expenses [was] attributed mainly to one-off items related to the ongoing transformation of the business as the group implements its new transformation strategy," Britam said.In January, strategy expert Tavaziva Madzinga replaced chief executive Benson Wairegi, who retired after 40 years of service.A leaner teamThe appointment was among changes at Britam, which introduced a leaner team of 11 managers, down from 19. Nine executive roles were scrapped. These included principal executive director, chief of staff and group chief operating officer.Corporate affairs and commercial directorships plus actuary and product development manager posts were also scrapped.