Britam, backed by Kenya’s elite, reverses $16 million paper loss on HF investment

Key Points

• Britam reversed a $16.2 million loss on its HF Group stake, citing a rebound in the mortgage lender’s profitability and a 31% rally in its share price.
• HF Group posted $4.06 million net profit in 2024, up 35.17%, with a rights issue and higher income boosting its capital and asset position to $542.5 million.
• Britam’s net profit rose 53.5% in 2024 to $38.9 million, driven by a 163% surge in investment income and tighter cost control across its business arms.

Britam Holdings, the Nairobi-based financial services group backed by prominent Kenyan investors Jimnah Mbaru, Peter Munga, James Mwangi, and Jane Wanjiru Michuki, has reversed over $16 million impairment loss previously recorded on its stake in the troubled mortgage lender HF Group, citing a marked recovery in financial performance and share price.

The Ksh2.09 billion ($16.2 million) impairment reversal reflects a full turnaround in HF Group’s fundamentals after years of capital shortfalls, liquidity strains, and stock underperformance. 

Britam restores loss, boosts buffers, profits soar

In 2022, HF posted a net profit of Ksh265.57 million ($2.05 million), recovering from a Ksh667.96 million ($5.17 million) loss in 2021. By 2024, profit after tax climbed 35.17 percent to Ksh524.7 million ($4.06 million), with total assets hitting Ksh70.15 billion ($542.5 million).

Britam’s impairment reversal restores the entire loss previously booked on its HF investment, including a Ksh1.57 billion ($12.15 million) write-down in 2018 and a further Ksh602.7 million ($4.66 million) charge in 2020. The move strengthens Britam’s capital buffers and improves its solvency ratios—key indicators for regulators and investors.

For the fiscal year ended Dec. 31, 2024, Britam reported a 53.5 percent jump in net profit to Ksh5.03 billion ($38.9 million), up from Ksh3.28 billion ($25.4 million) a year earlier, driven by robust investment returns and cost discipline. Net investment income surged 163 percent to Ksh30.6 billion ($236.7 million), while total assets rose 19.6 percent to Ksh208.5 billion ($1.62 billion). Equity climbed 15 percent to Ksh29.5 billion ($229.2 million).

Kenya remained Britam’s profit engine, contributing nearly 80 percent of group earnings, while regional operations across East Africa accounted for the rest. The firm’s total assets swelled 19.58 percent to Ksh208.5 billion ($1.62 billion), while equity rose 15 percent to Ksh29.5 billion ($229.24 million), up from Ksh25.7 billion ($199.71 million) in 2023.

Britam clears impairment, strengthens buffers, eyes growth

Britam Holdings, a leading insurance and financial services group in East and Central Africa, boasts a diversified portfolio spanning insurance, asset management, banking, and real estate. The company’s high-profile shareholder base, comprising influential Kenyan business leaders such as James Mwangi, Peter Munga, Jimnah Mbaru, Benson Wairegi, and Jane Wanjiru Michuki, underscores its strong market position.

The development signals a renewed vote of confidence in the mortgage financier’s business fundamentals and the synergies between the two firms, which collaborate in housing finance and insurance. It also enhances Britam’s capital buffers and solvency ratios, both of which are closely watched by regulators and investors alike. With the impairment now cleared, Britam is poised to refocus on its broader strategic priorities, including expanding its regional footprint and scaling up its retail asset management operations.