Insurance firm Britam has sold 20.1 million shares in Equity Bank, estimated to be worth Ksh852 million.
This leaves the underwriter with a Ksh6.77 percent stake equivalent to 255.6 million shares as of December 2020.
The disposal of the shares saw the underwriter lose Ksh134.5 million in “fair value loss”.
“Fair value loss relating to the disposal of the Equity Group Holdings shares totalled to Ksh134.5 million (compared to a gain of Ksh332.5 million in 2019),” said Britam in its annual report.
“Fair value loss on revaluation of the Equity Group shares totalled to Ksh4.2 billion (compared to a gain of Ksh501 billion in 2019.”
The insurer has been offloading the shares to comply with regulatory requirements, which require that an underwriter does not invest more than 10 percent of its total assets in banks.
Read: Britam Announces A Record Loss of Ksh9.1 Billion
“The concentration on equities in general and on specific counters is closely monitored. As at December 31, 2020, the group held shares in Equity Group Holdings Plc amounting to Ksh8.6 billion (2019: Ksh14.7 billion) or 12 percent (2019: 10 percent) of the total assets,” said Britam.
As of 2014, Britam’s stake in Equity represented 26 per cent of its total assets, before the Insurance Regulatory Authority (IRA) published the guidelines in 2015 capping the investment at 10 percent.
Britam recorded a Ksh9.1 billion loss in the year ended December, with Ksh5.2 billion in its asset management unit Wealth Fund Management Fund LLP.
“The holding company is committed to support the fund to fulfil its obligations as they fall due through management oversight of the fund’s operations and the agreed recovery plan,” Britam said.
Email your news TIPS to Editor@kahawatungu.com or WhatsApp +254707482874. You can also find us on Telegram through www.t.me/kahawatungu
Email your news TIPS to Editor@Kahawatungu.com — this is our only official communication channel
