Capital FM (Nairobi)

20 August 2014

Kenya: Britam's Growth Strategy Propels H1 Net Profit

Nairobi — British American Investments Company (Britam) has posted 27 percent rise in net profit to Sh2.7 billion for the half year period ending June 30, 2014 from Sh2.2 billion recorded during the same period in 2013.

Total revenues grew by 28 percent to Sh10.2 billion up from Sh8 billion, driven heavily by returns from stable equity market and fixed income investments while total assets grew by 28 percent to Sh55.1 billion from Sh42 billion recorded over the same period in 2013.

The Group Managing Director Benson Wairegi says this is attributed to the positive performance of all group business units and subsidiaries, and the implementation of its growth and diversification strategy of increased local and regional presence, continuous generation of innovative products, and IT enabled business transformation.

"We continue to see exponential growth of all our business units. The growth has been delivered by our deliberate move to diversify our investment portfolio, while expanding regionally. We are pleased with the results delivered by our subsidiaries of Uganda and South Sudan and we are optimistic that the second half of this year will equally deliver great results," he said.

The insurance business remains the most profitable, recording revenue of Sh5.3 billion against Sh4.3 billion recorded during the same period in 2013, representing a 23.2 percent growth while Asset Management revenues grew to Sh413.8 million up from Sh267.2 million in 2013, a growth trajectory of 54.4 percent.

The group's operating expenses grew by 49 percent to Sh1.8 billion from Sh1.2 billion owing to acquisitions as well as regional and local expansion.

Wairegi said the group has decided to halt acquisitions until 2016 to focus on the success achieved so far.

At a certain point in any business Journey you have to pause, look at what you have achieved and then make it successful. We will now focus on what we have acquired so far, till after 2016," he said.

In the period under review, the group bought Equity Bank's 24.75 percent stake in Housing Finance Company to help the mortgage lender expand.

The group also acquired a 99 percent equity stake in Real Insurance that has a presence in Kenya, Mozambique, Tanzania and Malawi during the period under review.

Investment in listed equities grew by 35 percent of total investment portfolio followed by fixed income at 28 percent, unit trusts at 13 percent and property at 9 percent while investment in associated companies remained at four percent.

Net claims were up 44 percent to Sh3.6 billion up from Sh2.5 billion.

The group successfully raised Sh6 billion last month through a bond issue, and also launched a county strategy that will see five new branches launched in Kenya by end 2014.

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