Chase and Imperial bonds cost Sanlam
SEE ALSO :Businessman arrested in Sh200m fraud act“Consequently, the management in consultation with the board will put together a turnaround strategy geared at advancing the group’s performance,” said the Sanlam board chairman, John Simba, in the press notice. Last year, Sanlam suffered the pain of writing off Sh1 billion after it became apparent that the Chase Bank and Imperial Bank bonds it had invested in were irredeemable. Distressed enterprises “The impaired amount recognised below relates to non-performing corporate bonds of Sh1,078,903,000 and Sh46,340,000 fixed deposit held as lien with a financial institution for ex-staff loans that are in payment arrears. The 2016 impairment related to non-performing financial instruments in the period,” said the firm in its annual report. Sanlam said 100 per cent impairment of corporate bonds placed in presently distressed local enterprises may come back to haunt them again.
SEE ALSO :Man charged with attempted fraudCurrently, Athi River Mining has sunk into receivership while carrying a corporate bond and Real People has sought an extension to settle its debt from August 6, 2018 to January 6, 2019. Sanlam Kenya Plc underwrites life and non-life insurance risks through its subsidiaries Sanlam Life Insurance and Sanlam General Insurance. Its related company, Sanlam Investments East Africa Ltd (SIEAL), has seen profits for the half-year drop by 1.7 per cent. For the six months to June this year, SIEAL posted a Sh71.6 million net profit, down from Sh72.9 million last year. Operational expenses Sanlam’s income rose from Sh264 million to Sh330 million, riding on fund management fees. However, costs went up 42 per cent on increased operational and administrative expenses. The board has been busy with emoluments, which rose nine-fold from Sh571,000 to Sh5.3 million, while employee costs increased from Sh130 million to Sh160 million.
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