File picture: FreeImages
File picture: FreeImages

Liberty buys stake in Nigeria

By Sandile Mchunu Time of article published Feb 27, 2017

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Durban - Financial service group Liberty Holdings on Friday announced that it would buy a 75 percent stake in a Nigerian long-term insurer for R160 million as part of its expansion into the continent.

The company said it had identified Nigeria as a potential expansion destination to shore up its losses in South Africa. It said said negotiations of acquiring a life licence in Nigeria were at an advanced stage.

The company said its annual normalised headline earnings for the financial year in 2016 came 37 percent lower to R2.53 billion.

The company said headline earnings from the group’s South African retail operations of R1.12 billion were 40.1 percent down compared to 2015 as a result of the significant strengthening of customer trends and regulatory developments, increased new business strain, lower positive operating variances on investment business as well as on risk business at early durations.

It said its management would continue to execute on growth and geographic expansion strategies.

Chief executive Thabo Dloti said Liberty Life resorted to a strategy of extending its presence in west Africa through the long-term insurance business and asset management business.

Read also: Biggest slump in 12 years for Liberty

“It may be having difficulties now, but everything indicates to us that in the long term, Nigeria is going to be a big contributor of growth if you are doing business in sub-Saharan Africa,” said Dloti.

Liberty has a presence in Nigeria through Total Health Trust, after it bought the remaining shares it did not already own for R142m in August 2015.

In 2016 it concluded three short-term insurance acquisitions in Uganda, Malawi and Botswana and received its licence in Lesotho to operate a life and health business.

The group said in order to improve policyholder investment options and to provide access to Liberty’s prestige direct property portfolio to non-policyholder investors, a portion of the Liberty Property Portfolio and Liberty PropCo (Liberty PropCo - which owned 25 percent undivided share in the Melrose Arch precinct in Johannesburg) was sold into a Real Estate Investment Trust named Liberty Two Degrees (L2D).

Liberty Life successfully listed L2D in December 2016, providing additional offerings to customers and raising R2.8 billion of new capital.

L2D was successfully listed on the JSE on December 6, 2016.

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