Asset management boosts BIHL profits
Business
Botswana Insurance Holding Limited’s operating profits increased by 18 % in the last financial year.
Sharing the results this week, BIHL Group Chief Executive Officer, Catherine Lesetedi-Letegele revealed increased total assets under management which seats at 26.7 billion pula including Zambia’s 4.1 billion in 2017 compared to 25.9 billion at the close of 2016 trading year indicating a 4 % increase. The BIHL subsidiary, Botswana Insurance Fund Management (BIFM) outperformed other segments by showing a continued trend in growth and profitable returns, Lesetedi-Letegele said.
Lesetedi-Letegele noted that her company was pleased with the asset management business performance: “Our assets under management (AUM) portfolio have continued its upward trajectory and the business has also successfully driven increased operating profit margins.”
“A relatively stable market performance in BIFM’s local and regional businesses also delivered a positive impact on asset management fee incomes consequently boosting our entire Group balance sheet,” she highlighted.
BIHL revealed that the Zambia asset management business performed well due to stable market performance and a favorable Kwacha performance. “All these factors had a positive impact on the outcome of this key segment of our business, we continue to efficiently manage and control costs across all business to ensure good overall business performance,” said Lesetedi –Letegele .
Further deliberating on Botswana Insurance Fund Management performance Letegele highlighted that profit before share of profit of associates and joint ventures under BIFM increased by 13% to P78 million in 2017 from P67.6 million in the corresponding period. The subsidiary‘s total profit for the year increased by 16% from 65.8 million in 2016 to P78.2 million in the year under review.
For other businesses Botswana Insurance Holdings Limited reports that their Life Insurance segment which is housed under Botswana Life realized net premium income growth of 12 % from 2.07 billion in 2016 compared to 2.32 billion in 2017 with all income lines posting growth of at least 7 % and above. Still under the Life Insurance segment total new business written grew by 11 % underpinned by strong single premium income performance.
Under short-term insurance business, BIHL reports that premium income was 6 % lower compared to the previous year mainly due to increasing defaults from clients failing to meet their premium obligations. “Improved claims administration on the new administration platform saw operating profit increasing from 0.5 million in 2016 to 1.3 million in 2016,” Lesetedi-Letegele shared. She observed that this were commendable results considering the one-off restructuring costs amounting to 2 million pula that were incurred during the year under review.
Further financial highlights at Group level indicate that BIHL total net income increased by 30% to P3 billion compared to P2.1 billion in 2016. The company’s group total assets increased by 7% to P15.6 billion compared to P14.4 billion in the previous year. However the BIHL Group profit before tax decreased by 18% to P469.6 million from over P575 million pula in 2016, this, according to the Group Chief Executive was underpinned by significant resources invested into refining business operations.
Lesetedi-Letegele also shared with stakeholders that Botswana Insurance Holdings Limited received approval from the shareholders on the BIFM Citizen Economic Empowerment initiative tabled at the Emergency General Meeting. “We are pleased to state that 25.1% of the BIFM shareholding will be given to staff through a staff performance share scheme,” she said
She further stated that her company continues to focus on key twin strategies of growth and profitability. “Though prospects for the economy remain mixed, reflecting both slower domestic growth and international economic uncertainty, we have successfully maintained capital management and solvency targets and the group remains well positioned,” she stated.
Business
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Business
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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Business
Moody’s Reaffirms African Trade Insurance’s A3 Rating & Revises Outlook to Positive
Moody’s Investors Service (“Moody’s”) has affirmed the A3 insurance financial strength rating (IFSR) of the African Trade Insurance Agency (ATI) for the fifth consecutive year and changed the outlook from stable to positive.
Moody’s noted that the change in outlook to positive reflects the strong growth in ATI’s membership base – that has resulted in improved portfolio diversification, strengthened capital adequacy, and the good profitability despite the challenging operating environment. In addition, ATI benefits from its preferred creditor status (PCS) amongst sovereign member states which protects it from the risk of default by member sovereigns through securing recoveries against claims paid on guarantees.
The strong membership and equity growth are some of the key considerations for the consistent reinstatement of ATI’s A/Stable rating by Standard & Poor’s and Moody’s rating, over the years. Also supporting the rating affirmation are; consistent improvement in financial performance, commitment of its shareholders who continue to uphold the preferred creditor status, its high quality and conservative investment portfolio as well as strong relationships with a number of global reinsurers that provide significant risk-bearing capacity.
With the change in outlook to “positive”, ATI is now better placed to provide enhanced support to its member countries, attract additional shareholding and grow its portfolio. The positive outlook is an indication that if ATI continues to demonstrate its strong underwriting performance and ability to recover claims under the preferred creditor arrangements, among other factors, an upward pressure towards an upgrade may be generated. The Moody’s press release can be accessed from here
Commenting on the rating, Africa Trade Insurance Chief Executive Officer Manuel Moses said: “This positive revision is in line with our 2023 – 2027 strategic objectives in which we set to improve our rating outlook to positive in the first year, and achieve an upgrade of at least “AA”/Stable rating by both Moody’s and S&P within this Strategic Plan period. We aim to achieve this by doubling our exposures and increasing our capital to more than USD1 billion.”
ATI’s mandate is to provide trade-credit and political risk insurance, as well as other risk mitigation products to its member countries and related public and private sector actors. These insurance products not only directly encourage and facilitate foreign direct investment as well as local private sector investment in our member countries, but also contribute to intra- and extra-African trade.
About The African Trade Insurance Agency
ATI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa. ATI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. Since inception, ATI has supported US$78 billion worth of investments and trade into Africa. For over a decade, ATI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATI obtained an A3/Stable rating from Moody’s, which has now been revised to A3/Positive.