Britam profit increases to Sh1.6bn on cost-cutting

Britam Towers. FILE PHOTO | NMG

Britam Holdings has posted a Sh1.69 billion net profit for the year ending December 2022 on reduced costs, marking a recovery from Sh72 million earned in the previous year.

The rise in net profit was despite the diversified financial services firm posting a drop in its income from Sh40.2 billion to Sh38.2 billion.

Britam’s bottom line was helped by a cut in expenses by 9.5 percent or Sh3.68 billion to Sh35.25 billion mainly on reduced operating costs which fell by 26 percent from Sh11.32 billion to Sh8.37 billion.

“The improved performance is attributable to a growth in top-line revenue as well as operating efficiency and cost management initiatives,” said Britam.

“This together with improved dividend and interest income helped cushion the significant fair value losses to register improved profitability.”

Britam attributed the 26 percent drop in operating expenses to efficiencies derived from cost containment measures under its changed operating model.

Read: Britam braces for Sh7bn loss in wealth management wing

Shareholders will however for the third year running go without any dividends. The last payment was on the 2019 results when the board paid Sh631 million.

Net earned revenue grew from Sh25.7 billion to Sh26.33 billion as gross earned premium and fund management fees grew.

However, total income dropped by five percent to Sh38.2 billion due to Sh3.93 billion losses on financial assets compared with Sh1.8 billion gain that was booked in the previous year.

The financial assets include shares listed at the Nairobi Securities Exchange (NSE), unquoted ordinary shares, government securities, corporate bonds, unit trust and investment in property funds.

Britam Life Assurance, which offers life covers, posted a net profit of Sh1.54 billion, a drop from Sh1.66 billion.

However, Britam General Insurance, which offers short-term covers such as motor and health, emerged from Sh33.28 million loss to a net profit of Sh234 million on reduced expenses.

Britam Asset Managers, another company within Britam Holdings, posted a net loss of Sh130 million, an improvement from a loss of Sh166 million as expenses dropped.

Overall, Britam said the regional units continued to increase their share in the Group’s revenue and profitability.

The review period saw general insurance businesses outside Kenya contribute 23 percent of the group’s gross earned premiums.

Read: Britam, mTek in a deal to cover SMEs against fires, burglary

Britam Group has a presence in seven countries in Africa namely Kenya, Uganda, Tanzania, Rwanda, South Sudan, Mozambique and Malawi.

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