Britam swings back to profitability as management changes investment tact

Financial services firm Britam Holdings has recorded a 346 percent rise in 2016 financial performance.

During the period, Britam reversed a Sh1 billion loss to a Sh2.4 billion.

This was attributed to a change in investment strategy that saw the firm turn to fixed income and reducing its holdings in equities after burning its fingers in 2015.

In the year under review, Britam cut its investments on equities from Sh23.2 billion to Sh18.1 billion while growing its fixed income portfolio to Sh25 billion.

Speaking while releasing the results on Monday, Britam Group Managing Director Benson Wairegi said the group decided to diversify from the Nairobi Securities Exchange and focus on risk free investments.

“The investment by Britam in HF Group and Equity Group Holdings also registered significant drops. Fortunately over the years Britam has been reviewing its strategy on the stock market where you will notice that our stock market investment in 2016 reduced from the high 20’s to about 13 percent in 2016,” Mr Wairegi said.

Britam grew its holdings in fixed income to 35 percent.

Apart from government securities, Britam has been active in the real estate market which continues to offer lucrative returns.

During the period investment income was up 20 percent to Sh5.2bn from Sh4 billion a year earlier.

Gross earned premiums were up three percent in 2016 to Sh20.2 billion as the firm grew its life insurance business.

Assets under management through Britam Asset Management stood at Sh109 billion with Sh929 million gained from fees.

With a regional presence in seven countries, all Britam’s subsidiaries made money with the exception of Rwanda.

Unlike most financial services firms operating in South Sudan, Britam was also able to generate Sh464 million to the group’s total profitability.

This as the firm priced all its policies in dollars and was able to make foreign exchange gains.

South Sudan is undergoing hyper inflation with Britam also raising salaries for its south Sudan staff.

Going forward, Mr Wairegi said the firm would focus on consolidating its operations.

“Our strategy well into 2018 is consolidation. Britam has grown very very rapidly over the last four, five years. With our geographical foot print in six countries we a very large and complex organization so we need to consolidate our gains and operations in these countries,” Mr Wairegi said.

“We want to focus on these entities, give them more support in terms of capital, in terms of management capacity and building the brand, he added.

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