Bifm to downscale Zambian stake to fit new statute

Botswana Insurance Fund Management (Bifm) will have to cut its stake in its Zambian asset management subsidiary from 71 percent to 49 percent before the end of the month.

This, according to outgoing Bifm CEO Victor Senye, will be done to comply with new legislation in Zambia that requires all asset management companies in the country to be at least 51 percent owned by Zambian citizens.

Speaking at the presentation of the results of parent company BIHL in Gaborone this week, Senye said they were in the process of identifying potential buyers of the stake and that priority would be given to current shareholders.

“The cutting down of our stake is one of the challenges that Bifm is facing at the moment,” he said. “We will try to compensate for the loss by fortifying that area of our business that has not been affected by the new legislation in Zambia.”

Apart from asset management, the BIHL group is into employee benefits and property development in Zambia.

Meanwhile, though he did not specify profit margins, Senye said Bifm had performed exceptionally well for the year ended December 31, 2009 after taking a sharp knock in 2008 as global financial markets collapsed.

“Looking ahead, we will continue to build on our achievements and focus on our key strategies of growth and profitability,” he said. “Our property activities have been extremely valuable and have enabled the company to take a leading role in the market.

“But while we are entrenched as a major property player in Botswana, our core business continues to be asset management.”

While Bifm reported profits at the same level as 2006, another member of the BIHL conglomerate, Botswana Life, reported a 45-percent increase in profits despite a difficult operating environment that was characterised by weakened disposable incomes for their clients.

Meanwhile, Botswana Life, whose CEO Regina Sikalesele-Vaka has just been rewarded with the plumb BIHL group CEO post, reported a 31-percent increase in net insurance premium income to P1.3 billion for the period, registering an operating profit of P218 million.

“We made excellent progress in the implementation of the Botswana Life 2009-2013 strategy,” she said. “This strategy has three key focus areas, namely, consolidation and retention of key clients, expansion and diversification.

I am proud to say that Botswana Life has succeeded in retaining all its major corporate clients as well as significantly increasing its individual sales business. Our results give us a justified cause for satisfaction.” As part of the group’s new strategy to maintain its dominance in the market, BIHL have announced a single substantive group CEO, Sikalesele-Vaka, who will oversee its five new subsidiaries that will embrace unit trusts and specific property and short-term insurance divisions in addition to Botswana Life and Bifm.

Until now, Senye and Sikalesele-Vaka were joint CEOs for BIHL. While Senye is being redeployed to head the property division, BIHL chairperson Batsho Dambe-Groth says the new heads of the other four divisions will be announced in the near future.

[MMEGI]