Britam ready for dividends after clearing Sh5.

Britam Holdings has completed the elimination of accumulated losses from its balance sheet through a Sh5.87 billion reduction in its share premium account, clearing the way for the resumption of dividend payments after a six-year pause. The Company Act bars an institution from paying dividends if it has accumulated losses. The Nairobi Securities Exchange-listed insurer said on Tuesday the reduction became effective on September 7, after the Registrar of Companies registered a High Court order and the statement of capital approving the transaction. The completion of the transaction, which was initiated in March, has seen Britam's share premium account fall to Sh7.36 billion from Sh13.24 billion, with the Sh5.87 billion reduction clearing the accumulated losses. Share premium represents the amount investors paid above the company's assigned share value. 'The reduction in the share premium account corresponds with an elimination of accumulated losses, and the company's underlying financial position remains unchanged,' Britam said in a statement. An accumulated loss is the total amount of money a business has lost over time that has not yet been covered or paid off by profits. Britam's move removes the balance-sheet constraint that had prevented it from rewarding shareholders despite returning to profitability. The insurer's last dividend payment was in 2019. The company had accumulated losses of about Sh5.8 billion at the end of 2025, preventing it from declaring a dividend despite posting profits for five years. Britam fell into an accumulated loss position for the first time in 2020, when a record loss of Sh9.1 billion wiped out the entire Sh1.77 billion retained earnings it had the previous year. The insurer's net profit rose to Sh5.53 billion in the year ended December 2025, from Sh5.03 billion a year earlier. In the half-year ended June 2026, Britam's net profit rose by 53.3 percent to Sh2.666 billion. The company had signalled in March that clearing the accumulated losses through its share premium account would allow it to resume shareholder payouts. '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,' Britam Managing Director Tom Gitogo said in March. The latest development completes the process that began with the board's proposal in March and shareholder approval on May 21. The High Court confirmed the transaction on July 30 and approved the statement of capital reflecting Britam's revised capital structure. The Registrar of Companies registered the court order and statement of capital on September 7, making the reduction effective. Britam said the restructuring has not affected shareholders' interests, with investors retaining the same number and class of shares they held before the transaction. In addition, the transaction did not reduce the insurer's equity or net assets because it involved an accounting transfer within the balance sheet as opposed to a distribution of assets.