Barclays eyes Kenyan asset management after deal
BARCLAYS Africa Group plans to move into the asset management business in Kenya this year after reaching a deal to buy a majority stake in insurer Kenya First Assurance Ltd for 2.8 billion shillings ($28.84 million).
Barclays’ deal to buy a 63.3 percent in the Kenyan insurance company is part of a plan to boost revenue from its African operations outside of South Africa.
Barclays Africa said last year it wants to grow the revenue contribution from its African markets, excluding South Africa, to 20-25 percent in three years from about 15 percent now, Lanz Zulu, Barclays Africa’s head of wealth and insurance told Reuters after the First Assurance deal was unveiled.
“We are actively looking at entering the market for an investment management business,” Zulu said, adding this could include setting up a business or buying one. “We would like to be in the market by the end of the year.”
First Assurance, which is ranked in the top 10 of Kenyan general insurers, recorded a profit after tax of 518 million shillings last year.
Zulu, who is the managing executive for Barclays Africa’s Wealth, Investment Management and Insurance business, said the deal was subject to regulatory approval in South Africa, Kenya and Tanzania, where First Assurance also operates. Barclays said about 700 million shillings of the 2.8 billion deal would go towards a capital injection.
Stephen Githiga, the managing director of First Assurance, told Reuters the deal would allow them to access a wider network of sales outlets.
“We only have six branches within the region. With this transaction, we will be able to sell our products and services to our customers with all the branches of Barclays which are almost 150 within east Africa,” Githiga said. He said First Assurance would also enter the Ugandan market next year.
Jeremy Awori, the chief executive of Barclays Kenya, said the acquisition of First Assurance would allow them to boost their insurance products following the launch of its life insurance business last month. “We want to see our bancassurance revenue growing going forward.
This represents an avenue for creating revenue,” he said, adding he expected the deal to be concluded before the end of September.
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