Mr Muthoga Ngera. file photo | nmg
Summary
- Britam’s corporate affairs director Muthoga Ngera told Business Daily the insurer now holds an 8.2 per cent stake in Equity.
- The insurer previously held a 10.1 per cent stake in Equity and has steadily sold the lender’s shares that it first acquired in 2004.
- With a market value of Sh10 billion, the Equity shares represent about 12 per cent of Britam’s total assets of Sh83.6 billion as of December 2016.
Insurance group Britam has sold 30.1 million shares of Equity Group
worth nearly Sh1 billion, cutting its interest in the lender to a new low of 8.2 per cent.
Britam’s corporate affairs director Muthoga Ngera told Business Daily
the insurer now holds an 8.2 per cent stake in Equity compared to nine
per cent in December 2015. The share sales are the latest move by the
Nairobi Securities Exchange-listed firm to reduce its concentration in
the lender which in 2014 accounted for 26 per cent of its total assets.
“This
is part of our normal portfolio balancing,” Mr Ngera said, noting that
Britam holds its investments in Equity directly and through its various
insurance subsidiaries.
The insurer previously held a
10.1 per cent stake in Equity and has steadily sold the lender’s shares
that it first acquired in 2004.
The lender’s long-term
stock price rally saw it rise to dominate Britam’s assets mix, with the
share sales bringing the stake closer to the maximum threshold proposed
by the Insurance Regulatory Authority (IRA). The regulator in 2015
published draft investment guidelines that capped some insurer’s
investment in a single company at five per cent and in a bank at 10 per
cent.
“An insurer transacting long term business shall
not invest more than five per cent of the total assets of the insurer in
any company, commodity or group of related companies,” reads part of
the guidelines.
“Where the company or group of related
companies is a bank or financial institution, the maximum limit for the
investment shall be 10 per cent.”
With a market value of Sh10 billion, the Equity shares
represent about 12 per cent of Britam’s total assets of Sh83.6 billion
as of December 2016.
The insurer’s other major investment at the Nairobi bourse is mortgage financier HF Group
in which it holds a 48.8 per cent stake.
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