Dr.Peter Ndegwa(R) CEO Safaricom PLC testing out the SHOOK robot together with Jerusha Okubasu Youth Segment Lead SHOOK during the Safaricom Decode event held at Sarit Exco Nairobi. [Wilberforce Okwiri,Standard]
The surge in money market funds (MMFs) that offered investors double-digit returns in 2024 propelled financial services firms to record profits during the year.
Financial statements published by some of the firms show income growth exceeding 100 per cent for the period ended December 31, 2024.
During this period, returns from MMFs were as high as 17 per cent on the high interest rates the government was offering on Treasury-bills and bonds.
But as the Central Bank of Kenya (CBK) cut the base lending rate, returns on T-bills have gone below 10 per cent, necessitating returns on MMFs to also cool off to as low as seven per cent.
An example is the Safaricom Ziidi MMF that came into the market with a return proposition of 13 percent, but the rates had cooled off to 7.39 per cent as of yesterday. Jubilee Asset Management and Britam Holdings are among these firms that posted good returns.
CPF Asset Managers, on the other hand, was able to recover from a Sh10.1 million loss posted in the 15 months ended December 31, 2023 to record a Sh1.4 million profit for the year ended December 31, 2024.
CIC Group, which is the parent company for CIC Asset Managers, also saw its assets under management increase by Sh6.0 billion in the review period.
“Customer service index stood at 86 per cent with over 7,000 agents and brokers and Sh152 billion plus assets under management. That is both MMF and pension fund,” said CIC Group Managing Director Patrick Nyaga during the recent release of the Group’s financial statements. CIC Group reported a profit after tax of Sh2.8 billion in the period, up from Sh1.4 billion previously.
CIC Asset Management’s profitability grew by 7.0 percent, with profit before tax hitting Sh753 million, up from Sh704 million. “The business has continued to enhance customer experience through various channels, including the recently launched mobile app,” said the firm in a statement. While the audited financial statements for Jubilee Asset Management Ltd and Jubilee Unit Trust Collective Investment Scheme reflect a loss after tax of Sh42.1 million, returns from Jubilee Money Market Fund shot up to Sh396.0 million. This is an increase of 704.4 per cent when compared to the Sh49.2 million reported as profit for the year ended December 31, 2023. Total income on MMF went up from Sh64.4 million to Sh462.8 million in the period.
Jubilee dollar-denominated MMF, which is a new asset class recently licensed by the Capital Markets Authority (CMA), reported a profit of Sh21.8 million for the six months ended December 31, 2024.
