Britam Holdings is seeking to use part of its share premium to clear its accumulated losses, a move that will allow it to pay dividend and end a six-year dry spell for shareholders.
The listed insurer on Tuesday reported a 9.99 percent growth in net profit for the year ended December 2025 to Sh5.53 billion, up from Sh5 billion a year earlier but did not recommend a dividend due to accumulated losses in its books.
The Company Act bars an institution from paying dividends if it has accumulated losses. Britam had an accumulated loss of Sh5.8 billion in the year ended December 2025.
Britam is seeking to clear the amount using the share premium –representing the amount investors pay above the assigned share value— which stands at Sh13.2 billion. The share premium account will subsequently reduce to Sh7.3 billion.
“We are choosing to use Sh5.8 billion of the Sh13.2 billion we have as share premium to extinguish the balance of the accumulated loss so that we can pay dividends even probably an interim dividend; because it is not a cash flow issue but technicality,” said Britam’s managing director Tom Gitogo.
Shareholders have to approve the share premium reduction during the annual general meeting in May and later regulators including Capital Markets Authority and the High Court through an order.
Reduction of the share premium will not affect shareholding of the company nor its total equity position.
Britam has lowered the accumulated loss in the last five years to Sh5.8 billion using dividend payouts from its subsidiaries.
The insurer has been relying on dividends from its subsidiaries to cut back the accumulated losses as it is not an operating entity.
Britam operates life assurance, general insurance and asset management in seven countries including Rwanda, Uganda, Tanzania, South Sudan, Mozambique and Malawi.
“The rate at which we've been making profits won't exhaust this (accumulated losses) quickly. The only way to exhaust it quickly is if we declare full dividends from the subsidiaries –but we have also been strengthening those businesses and need to continue doing so,” said Mr Gitogo.
The asset management subsidiary recorded the fastest profit growth for the group with its full year net earnings surging to Sh323.3 million, up from Sh18.9 million a year. The profit growth followed a 23 percent growth on assets under management to Sh267 billion.
The general insurance business reported a 10.6 percent profit growth to Sh1.38 billion up from Sh1.25 billion in the previous review period. The growth was despite a 10.1 percent drop in insurance revenues and an increase in claims.
Management attributed the increase in claims to payouts relating to 2024 political unrests and floods in the first half of 2025. The life insurance business recorded a 5.2 percent profit drop to Sh3.7 billion arising from growth in claims.
Britam is also seeking to broaden its Employee Share Ownership Program (ESOP) to five percent of the issued share capital of the insurer up from the current two percent.
“ESOP has become a modern way of attracting and retaining talent. The two percent was for top management but with the additional three percent we can open it to the rest of the staff,” said Mr Gitogo.
