Botswana Insurance Fund Managers (BIFM) has reported decline (8 percent) in profits in the half year ended June 2018 due to low performance of Zambia operations. BIFM, which is a subsidiary of Botswana Insurance Holdings Limited (BIHL), is showing stagnant performance compared to prior year due to adverse performance of the assets under management.
Presenting the results on Tuesday, Botswana Insurance Holdings Limited (BIHL) Group Chief Executive Officer, Catherine Lesetedi said the group did not achieve the target under BIFM as corporate cash is not stable. “Under BIFM we did not achieve the target for the period because corporate cash is not stable so we had more outflows than inflows.
However, we are continuing with aggressive competitive pricing on group schemes,” said Lesetedi, adding that unemployment is also a major contributor to low performance on investment market. Lesetedi explained that despite the current difficult trading conditions, where the group has witnessed several new entrants into the market and pension funds adopting new strategies of splitting mandates, BIFM has shown resilience and continued to gain market confidence and maintain its position as a leading market asset management company.
BIFM’s group total assets under management including Zambia operations stand at P26 billion. “Management continues to manage and control costs across all businesses to ensure good overall business performance,” said Lesetedi. BIFM contributed 12 percent revenue to the BIHL group.
In its year ended December 2017, it recorded good performance in Zambia asset management business due to stable market and a favorable Kwacha performance. The group saw BIFM’s profits increasing by 13 percent to P78 million in 2017 from P67.6 million in the corresponding period.
The subsidiary‘s total profit for the year increased by 16 percent from 65.8 million in 2016 to P78.2 million for the period. However, BIHL group recorded eight percent increase in profit to P272. 4 million while the operating profit increased by 15 percent to P170, 9 million due to operational earnings being higher under annuity portfolio.
BIHL group, Chairperson Batsho Dambe-Groth said global economic landscape remains challenging but the group remains positive as government promises to focus on creating employment and policy reviews. “Looking ahead, higher global commodity prices, improving political landscape in the SADC region and planned public investment make growth outlook in Botswana broadly positive.
The local sentiment has been particularly positive following the new government promise to focus on creating employment and policy reviews,” said Dambe-Groth.