Britam earnings jump 184pc after cutting NSE exposure

What you need to know:

  • This marks a turnaround for the firm, which posted a full year loss of Sh1 billion in the period to December due to lower valuations of the companies the firm has invested in at the NSE.

Britam Holdings has shrugged off the bearish run at the Nairobi Securities Exchange (NSE) to raise profits 184 per cent in the six months to the end of June, helped by increased investment income.

Britam, which has insurance, asset management and property development businesses, posted a profit of Sh1.77 billion in the half year, up from Sh624 million in a similar period a year earlier.

This marks a turnaround for the firm, which posted a full year loss of Sh1 billion in the period to December due to lower valuations of the companies the firm has invested in at the NSE.

“The overall business is looking healthy, and the shift in investments that made us lower our share of equities cushioned us from the NSE bear run,” said Gladys Karuri, Britam’s finance and strategy director, adding that Britam sold some shares and pumped in more cash in government securities and fixed deposit accounts.

Its share of equities stood at 16 per cent of its Sh81.7 billion assets, down from 25 per cent last year. It raised investments on fixed bank deposits and government securities to 38 per cent from less than 20 per cent last year.  

Investment income was up 41 per cent to Sh2.4 billion.

The benchmark NSE 20-Share Index lost 21.9 per cent last year following a steep drop in stock prices that saw investor wealth at the bourse as measured by market capitalisation shrink by Sh251 billion.

The index is down 15 per cent since the start of the year.