This archive report was first published on 21 August 2020.
Britam Kenya, a leading financial services group, has reported a significant decline in its financial performance for the half-year ended June 30, 2020. According to the group's unaudited results, Britam sank to a Ksh1.6 billion loss, a stark contrast to the Ksh1.67 billion profit after tax posted the previous year.
Group Managing Director Benson Wairegi attributed the poor performance to the adverse effects of the COVID-19 pandemic, which has led to a depressed performance of the stock market. As a result, investors' preferences have shifted to fixed income securities, negatively impacting Britam's financials.
Furthermore, Wairegi noted that the pandemic has led to property revaluation losses of Ksh929 million due to the depressed property market, characterized by low occupancy levels and rental yields.
Despite the challenges, Britam's balance sheet increased to Ksh128.5 billion in the first half of 2020, up from Ksh125.2 billion. Investments assets accounted for the largest value, standing at Ksh108.8 billion compared to Ksh107.8 billion during the period under review.
However, Britam's total income from investments, financial gains from assets, and commissions fell to Ksh12.9 billion, down from Ksh16.9 billion. This decline was weighed down by Ksh3.2 billion losses incurred from the group's assets.
Notably, the group raked in Ksh635.6 million from commissions in H1 2020, compared to Ksh508.7 million earned in H1 2019. Net insurance claims, policyholder's benefits, and loss adjustment expenses increased during the period under review to Ksh8.1 billion from Ksh6.6 billion.
Operating costs, however, fell to Ksh3.9 billion from Ksh4.2 billion, while commission expenses adjusted upwards to Ksh1.8 billion from Ksh1.7 billion. Cumulatively, shareholders' funds fell to Ksh25 billion from Ksh29.2 billion as net assets stood at Ksh25.1 billion at the end of June 2020, down from Ksh29.3 billion.
As a result, the Britam board declined to recommend payment of an interim dividend.
