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

On the back of lower expenses, Britam Holdings reported a net profit of Sh1.69 billion for the year ending December 2022, up from the Sh72 million earned the year before.

Despite the diversified financial services company reporting a decline in revenue from Sh40.2 billion to Sh38.2 billion, net profit rose.

Reduced operating costs, which fell by 26% from Sh11.32 billion to Sh8.37 billion, helped Britam’s bottom line. Total expenses were cut by 9.5 percent, or Sh3.68 billion, to Sh35.25 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 decrease in operating costs to efficiencies brought about by cost-cutting measures implemented as part of its modified operating model.

However, shareholders will not receive any dividends for a third year in a row. The board made its most recent payment of Sh631 million in relation to the 2019 results.

Gross earned premium and fund management fees increased, resulting in an increase in net earned revenue from Sh25.7 billion to Sh26.33 billion.

However, losses on financial assets of Sh3.93 billion, as opposed to gains of Sh1.8 billion recorded in the prior year, caused a five percent drop in total income to Sh38.2 billion.

The provider of life insurance Britam Life Assurance reported a net profit of Sh1.54 billion, down from Sh1.66 billion.

On account of lower expenses, Britam General Insurance, which provides short-term covers like motor and health, turned a loss of Sh33.28 million into a net profit of Sh234 million.

Another Britam Holdings company, Britam Asset Managers, reported a net loss of Sh130 million, down from a loss of Sh166 million as expenses decreased.

Overall, the revenue and profitability of the Group’s regional units continued to rise, according to Britam.

Seven African nations, namely Kenya, Uganda, Tanzania, Rwanda, South Sudan, Mozambique, and Malawi, are home to Britam Group.