Real estate and Housing Finance pulls down Britam’s prospects
Diversified Insurance firm British-American Investments Company has lost over Sh2 billion in its investment in Housing Finance over the last two years.
Britam has written off Sh1.3 billion for the year ended 2017 compared to Sh838 million in 2016, bringing cumulative impairment to Sh2.1 billion.
Britam said that the share of profit of the associated accounts for Sh53 million in the Group profit before tax, a decline of 88 percent from Sh442.3 million in 2016.
The firm blamed this on difficult operating environment particularly the introduction of the interest rate capping regulation.
Its investments in property and real estate which includes rent and value of property also depressed earnings dropping 161 percent to a loss of Sh607.3 million from a profit of 991.1 million in 2016.
Britam, however, says other sources of income came in handy with interest and dividends income increasing by 19 percent from Sh4.2 billion in 2016 to Sh5.1 billion.
As investments in the bourse the firm gained Sh2.2 billion compared to a loss of Sh1.9 billion in 2016 and fair value losses on disposal of shares of Shs 49.5 million (2016: Shs 44.7 million).
Britam said that Group’s investment in equities returned fair value gains amounting to The fair value gains are due to the bullish market we continue to experience in the equities market in the Nairobi Securities Exchange.