Britam Holdings, a prominent financial services conglomerate partly owned by Kenya’s wealthiest investors, has announced a significant cash injection of Ksh660 million ($4.98 million) into its wealth management fund, Britam Wealth Management LLP, in a strategic move aimed at ensuring financial stability and solvency.
This move, aimed at shoring up the unit’s liquidity, brings Britam’s total cash injection into the fund to Ksh6.9 billion ($53.1 million) as of December 2023. The liquidity support approaches the Ksh7.2 billion (USD 54.4 million) provision Britam Holdings set aside for potential investment losses in Britam Wealth Management LLP. The fund, managed by Britam Asset Managers Limited, encountered an asset-liability mismatch in 2020.
“The assumptions we had built about the recovery of the gap were highly affected by the macroeconomic environment with a significant increase in interest rates,” said Charles Kimani, Britam’s finance director, setting the rationale for the cash injection. “The growth we had anticipated in the fund did not come through as expected, forcing us to go back to the drawing board.”
Britam’s profit hits $24 million
Britam Holdings boasts a roster of prominent Kenyan investors, including James Mwangi, Peter Munga, Jimnah Mbaru, Benson Wairegi, and Jane Wanjiru Michuki. The group has a diversified portfolio spanning insurance, asset management, banking, and real estate, solidifying its position as a dominant player in the regional financial services sector.
The Nairobi-based firm delivered a stellar performance in fiscal 2023, with net profit doubling to Ksh3.2 billion ($24.13 million) from Ksh1.6 billion ($12.07 million) the prior year. This was driven by a 60.87 percent increase in net insurance revenue. Stronger underwriting performance and cost-cutting measures, including reduced financing expenses on insurance contracts, contributed to the improved bottom line.
Britam’s net investment income climbs
Britam also saw a modest 2.6 percent increase in net investment income to Ksh11.61 billion ($87.56 million) from Ksh11.32 billion ($85.37 million) on the back of improved interest and dividend income.
Notably, net insurance and finance expenses edged down 5.6 percent to Ksh8.5 billion ($64.10 million) from Ksh9 billion ($67.87 million) in the prior year. Mirroring the improved financial performance, Britam’s fund management fees and other income grew, offsetting operating expense expansion.
The group’s total assets increased to Ksh174.4 billion ($1.31 billion) from Ksh152.9 billion ($1.15 billion), while total equity rose to Ksh25.6 billion ($193.07 million) from Ksh22.2 billion ($167.42 million).
