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Britam Holdings, a prominent financial services conglomerate partially 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 to ensure financial stability and solvency.
This step, intended at improving the unit’s liquidity, raises Britam’s total capital infusion into the fund to Ksh6.9 billion ($53.1 million) by December 2023. Britam Holdings set aside Ksh7.2 billion (USD 54.4 million) for anticipated investment losses in Britam Wealth Management LLP, therefore the liquidity assistance is approaching that figure. Britam Asset Managers Limited administered the fund, which experienced an asset-liability mismatch in the year 2020.
“The assumptions we had made about the gap’s recovery were heavily influenced by the macroeconomic environment, which included a significant increase in interest rates,” said Charles Kimani, Britam’s financial director, explaining 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 Holdings has famous Kenyan investors, including James Mwangi, Peter Munga, Jimnah Mbaru, Benson Wairegi, and Jane Wanjiru Michuki. The business has a diverse portfolio that includes insurance, asset management, banking, and real estate, reinforcing its position as a dominating player in the regional financial services industry.
In fiscal 2023, the Nairobi-based firm’s net profit doubled to Ksh3.2 billion ($24.13 million), up from Ksh1.6 billion ($12.07 million) in the previous year. This was fueled by a 60.87 percent surge in net insurance revenue. Stronger underwriting performance and cost-cutting strategies, such as lower financing expenses on insurance contracts, helped to boost the bottom line.
Britam’s net investment income increased by 2.6 percent to Ksh11.61 billion ($87.56 million) from Ksh11.32 billion ($85.37 million), driven by higher interest and dividend income.
Notably, net insurance and financial expenses fell 5.6 percent to Ksh8.5 billion ($64.10 million), from Ksh9 billion ($67.87 million) the previous year. Britam’s fund management fees and other income increased in line with its improved financial performance, offsetting the increase in operational expenses.
Total assets climbed to Ksh174.4 billion ($1.31 billion) from Ksh152.9 billion ($1.15 billion), while total equity increased to Ksh25.6 billion ($193.07 million) from Ksh22.2 billion ($167.42 million).
