Sanlam sells off Ksh.450 million property


Sanlam sells off Ksh.450 million property
Sanlam Kenya CFO Kevin Mworia with Sanlam Life CEO Stella Njunge and Group CEO Patrick Tumbo PHOTO | COURTESY

In Summary

  • The company which remains on an aggressive asset recovery strategy following a rough patch in 2018 has set a new target of raking in at least Ksh.2 billion in recoveries for the year.
  • Sanlam has already shunned new investments in commercial paper with write-offs in the portfolio having cost the firm in its posting of its first loss in over a decade.
  • On Thursday, the firm announced a full turnaround in the posting of Ksh.114.4 million profit in 2019 to return from the previous Ksh.2 billion loss with the rebound being anchored on higher investment income and improved underwriting in its core business.

Insurer Sanlam sold off a property worth Ksh.450 million in  December 2019 as it sought to cut its exposure to the struggling real estate industry.

The company which remains on an aggressive asset recovery strategy following a rough patch in 2018 has set a new target of raking in at least Ksh.2 billion in recoveries for the year.

Further, Sanlam remains engaged on the recovery of investments in Kaluworks, Nakumatt Holdings and Athi River Mining (ARM) having restructured its Ksh.398 million corporate bond with Real People Kenya reclassifying the paper’s status from a default.

According to Sanlam’s Chief Financial Officer Kevin Mworia, the review of the insurer’s investment portfolio is driven by the need to drive returns for clients and shareholders as the company climbs back from a shock 2018 loss.

“We manage a banquet of assets that’s expected to give a competitive return to our client and shareholders. The decisions are purely based on the return we expect,” he said.

Sanlam has already shunned new investments in commercial paper with write-offs in the portfolio having cost the firm in its posting of its first loss in over a decade.

“As unsecured creditors in commercial paper, we know the secured take preference and then we are left with the leftovers,” said Sanlam Group Chief Executive Officer Patrick Tumbo.

To prune its loss making situations during the year, Sanlam undertook a general review of its business to incorporate staff restructuring through a voluntary early retirement program (VER) with the view of cutting costs to an annualized Ksh.200 million.

In the end, the redundancy exercise onboarded 23 staff and incurred costs rounding off to Ksh.53 million.

On Thursday, the firm announced a full turnaround in the posting of Ksh.114.4 million profit in 2019 to return from the previous Ksh.2 billion loss with the rebound being anchored on higher investment income and improved underwriting in its core business.

Sanlam expects to remain on the resurgence and holds out for a potential declaration of dividends to shareholders in the near term.

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