Financial services group Britam Kenya has sunk to a Ksh1.6 billion loss for the half-year ended June 30, 2020, compared to the Ksh1.67 billion profit after tax posted the previous year, the group’s unaudited results show.
Group Managing Director Benson Wairegi attributes the poor performance to the adverse effects of the COVID-19 pandemic which he says has led to the depressed performance of the stock market as investors’ preferences shift to fixed income securities.
By the same token, Wairegi also said that the pandemic has led to property revaluation losses of Ksh929 million due to the depressed property market which has been characterized by low occupancy levels and rental yields.
The group’s balance sheet increased to Ksh128.5 billion in the first half of 2020, up from Ksh125.2 billion with investments assets accounting for the largest value standing at Ksh108.8 billion compared to Ksh107.8 billion during the period under review.
Britam’s total income from investments, financial gains from assets, and commissions fell to Ksh12.9 billion down from Ksh16.9 billion weighed down by Ksh3.2 billion losses incurred from the group’s assets.
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The group raked in Ksh635.6 million from commissions in H1 2020 compared to the 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.
Consequently, the Britam board declined to recommend payment of an interim dividend.