Financial Services Provider, Sanlam Kenya Fine-Tunes Business Strategy to Facilitate Growth Following $15m Loss

Google+ Pinterest LinkedIn Tumblr +

 

 

Sanlam Kenya, a leading listed non-bank financial service provider, has announced a strategic business recovery strategy following the release of its half-year trading results.

In its trading results released this week, Sanlam Kenya posted a Ksh1.53 billion ($15 million) loss attributed to a 100% prudent impairment of distressed financial assets, slower economic growth and continued interest rates capping effects within the period under review.

Following the announcement, Sanlam Kenya Group CEO, Patrick Tumbo said that for the firm to maintain prudent standards, it had “opted to proactively impair financial assets.”

These assets include corporate bonds worth more than Ksh1.1 billion (about $ 10 million) earlier invested in companies currently showing signs of financial strain. Immediate collection efforts on the outstanding amounts, he said, have already started with a high chance of recovery.

To ensure business stability, Tumbo said the business will be adopting a variety of remedial interventions including an enhanced investment policy to facilitate sustained growth.

The interventions, which also feature the firm’s management team reorganization, are expected to accelerate growth from alternative market segments and new revenue streams including an enhanced focus on the firm’s General and Life Insurance businesses.

Sanlam Kenya provides a comprehensive suite of financial solutions through its subsidiaries: Sanlam Life Insurance Limited, Sanlam Investments Limited, Sanlam General Insurance Limited and Sanlam Securities Limited. The firm is known for its operations in the Asset Management, General and Life Insurance space.

“It will no longer be business as usual. We have adopted a revised business model and we will be pursuing key initiatives geared at elevating the business back on a profitability path,” Tumbo said.

“On this journey, we shall be anchoring our business operations on an enhanced investment policy, to secure the interests of all our stakeholders,” he continued.

Compounded by economic headwinds that have characterized the local market, Sanlam Kenya – in keeping with prudent business practice – has impaired financial assets amounting to Ksh1.114 billion (over $10 million) covering earlier corporate bond investments in distressed local enterprises. Some of the corporate bond investees included Kenya-based firms such as Athi River Mining (under administration), Real People and Kaluworks.

“These facilities are at various stages of financial distress and it remains prudent for us to maintain a balance sheet that reflects this status as collection and recovery efforts progress,” Tumbo said.

Share.

About Author

Leave A Reply