18.3 C
Monday, October 2, 2023
HomeWorld NewsSh1bn shareholder loan boosts Sanlam General

Sh1bn shareholder loan boosts Sanlam General


Related stories

Macro Briefing: 29 August 2023

* US and China agree to take steps...

Global Markets Rally, Posting First Weekly Gain In A Month

After three straight weekly declines, the Global Market...

Macro Briefing: 28 August 2023

* Inflation “remains too high,” says Fed Chairman...

In search of a new economic playbook

Chinese corporate earnings reports this week are forecast...

FirstFT: Western companies sound alarm over China’s sluggish recovery

Receive free Global Economy updatesWe’ll send you a...


Sh1bn shareholder loan boosts Sanlam General


Sanlam House on Kenyatta Avenue in Nairobi. FILE PHOTO | SALATON NJAU | NMG

Sanlam General Insurance has complied with regulatory capital levels after obtaining a Sh1.08 billion shareholder loan.

The latest financial disclosures show that Sanlam General, which is part of Sanlam Kenya that also runs the Sanlam Life business, closed the year ended December 2022 with a capital adequacy ratio of 100 percent compared with negative 81 percent in the previous period.

Insurance Regulatory Act 2020 requires any insurer carrying out insurance business in Kenya to at all times maintain the capital adequacy ratio of 100 per cent.

The loan was tapped in May last year from Sanlam Emerging Markets who indirectly own 41 percent of the shares of Sanlam General to help the Kenyan subsidiary in meeting its financial obligations.

The amount was to help Sanlam Kenya to bridge the capital shortfall in the interim until the shareholders inject additional capital.

The Sh1.08 billion loan, however, sank Sanlam General into negative equity, meaning that shareholders may be forced to raise additional money to boost its operations.

The loan drove up total liabilities by 20 percent from Sh4.53 billion to Sh5.42 billion, outstripping the Sh5.4 billion assets by Sh20.4 million.

Shareholders will be under pressure to add in money after general business missed the board’s targets.

The board had projected Sanlam General to post an after-tax profit of Sh207 million but this was not achieved as it closed the year with losses. Net loss in the general insurance narrowed from Sh500.9 million to Sh151.66 million.

Sanlam General’s accumulated losses have now hit Sh1.15 billion from the previous year’s Sh998 million.

In the year ended December, Sanlam General’s income had fallen from Sh3.48 billion to Sh3.17 billion as gross written premiums dropped by about a third to Sh3.3 billion.

The general business however managed to cut the losses due to a 22 percent or Sh902 million fall in total expenses to Sh3.24 billion.

The cut in costs was helped by a 52 percent fall in operating expenses from Sh1.03 billion to Sh488 million.

Sanlam Life Insurance business posted a drop in net profit from Sh641.99 million to Sh608.6 million during the review period but the reduced losses in general business helped narrow losses for the group.

The group —made up of life and general business— cut the net loss by 90 percent to Sh54.07 million from Sh542.36 million.

→ [email protected]

Source link


- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories



Please enter your comment!
Please enter your name here