Africa-Press – Kenya. Shareholders of Britam will have to wait longer for their earnings after the financial services firm failed to declare any dividends for the year ended December 2023.
This is despite the company more than doubling its net profit to Sh3.3 billion for the year, attributed to the increased insurance underwriting.
The company recorded a 97.5 percent improvement from the Sh1.6 billion posted last year, as net revenue from insurance increased by 60.8 percent, reaching Sh3.7 billion.
Last year however the figure stood at Sh2.3 billion, excluding income before insurance service expenses and expenses related to reinsurance contracts.
Britam Group finance director Charles Njuguna told the Star that in the interim the firm will plough back the profit.
“We are not able to issue dividends because our retained earnings are in the negative. We first need to cure that negative earnings for us to pay dividends,” said Njuguna.
Retained earnings are the amount of profit a company has left after paying all its direct costs, indirect costs and income taxes.
According to Njuguna the plan will see the insurer focus more towards digital in response to its demographics and targeting of more clients without predictable income.
He added that the company has three million customers in the digital channels and emerging consumers segment.
Britam Group Managing Director and CEO Tom Gitogo, said the insurer will focus on the penetration of micro insurance as one of its core pillars to grow its business over the near to medium term.
“We got the approval from IRA for our new outfit and now it is becoming operational. For the first year of operations we made a profit of around Sh27 million, so it is a case of scaling it up using digital capabilities as well as partnerships,” added Njuguna.
He said the priority at that moment was to onboard those customers and to begin providing them with solutions that aligned with their income cycles.
In the 2023 performance, Britam saw its net investment income rise by 2.6 percent to reach Sh11.6 billion from Sh11.3 billion on improved interest and dividend income.
Similarly, the regional financial services provider experienced a rise in fund management fees and other income, which helped counterbalance the growth in other operating expenses.
By the end of the period, Britam witnessed its total assets reaching Sh174.4 billion, up from Sh152.9 billion previously, with total equity also showing improvement to Sh25.6 billion from Sh22.2 billion the previous year.
The Group has maintained that the balance sheet remains robust, with total equity increasing to Sh25.69 billion from Sh22.16 billion in the previous year.
This improvement in equity highlights the Group’s strengthened financial position and underscores its ability to weather economic uncertainties.
The year under review marks the third year of the Group’s implementation of its five-year strategic plan for the period 2021-2025. The positive outcome achieved during the year is a clear indication that the Group’s customer-centric strategy is yielding significant benefits.
This strategy prioritises the enhancement of customer value and experience, expansion of the customer base to drive growth, and improvement of efficiencies to generate better returns.
“We are confident of the growth and performance trend that Britam has achieved, supported by its subsidiaries in Kenya and in the region” added Gitogo.
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