Analysis: the same earnings per share, for different reasons

The disclosure establishes that the underwriting book performed better and that the investment book performed worse. It does not establish that the group’s earnings power is unchanged, even though headline earnings per share attributable to shareholders came in at 0.43 in both periods. Last year that 0.43 was 0.80 from continuing operations less a 168 loss from discontinued operations. This year there is no discontinued item, so the 0.43 is what the continuing business produced on its own. A reader comparing only the headline figure would miss a fall of roughly half in continuing earnings.

The mechanism behind the fall is stated by the company: a lower interest rate environment that has reduced net yields. That is worth grounding. The Central Bank of Kenya publishes the Central Bank Rate under Section 36 (4) of the Central Bank of Kenya Act, and its Monetary Policy Committee reviews the rate at least every two months, with the level signalling the policy stance. Kenyan insurers hold much of their float in government paper: Treasury bills mature in 91, 182 or 364 days and are auctioned weekly, with a minimum face value of Kshs 50,000.00 for non-competitive bids. A book that reprices on a 91 to 364 day cycle passes a lower policy rate through to net yields within a year, which is roughly the period the group is describing.

That has a consequence the announcement does not spell out. Financial investments grew to 34 864 from 29 676 while net investment income fell to 1 677 from 2 168. Growth in the asset base did not offset the yield compression, and if the rate environment stays where it is, further growth in the book will not do so either. The lever that remains is underwriting, and the insurance service result of 448 against 225 is higher than in the comparative period.

The offsetting caution is inside the same sentence the directors wrote. A high level of claims in general insurance sits alongside the improved service result, which means the improvement is not uniform across the two books. The abridged statement does not split the insurance service result between life and general insurance, so the composition of the improvement cannot be tested from this document. The full interim statements are where that split would appear.

One more line deserves attention. Operating expenses rose to 758 from 682 on a systems migration the group calls one-off. A cost described as one-off in an interim announcement is verifiable only when it stops, so the next comparable period is the test.

What the documents say

Liberty Kenya Holdings Plc (NSE: LBTY) published unaudited group and company results for the six months ended 30 June 2026 on 17 August 2026. Underwriting improved sharply and investment income fell, and the second effect was the larger of the two. Basic and diluted earnings per share from continuing operations were KShs 0.43 against KShs 0.80 in the corresponding period of 2025. The directors did not recommend an interim dividend.

Liberty Kenya Holdings is the parent of the Liberty and Heritage insurance businesses, which are regulated by the Insurance Regulatory Authority. Its shares trade under the symbol LBTY in the exchange’s insurance segment, with ISIN KE2000002168, alongside Jubilee Holdings, Sanlam Allianz Holdings (Kenya) and Kenya Re-Insurance Corporation. All figures below are as the company publishes them, in KShs millions.

Underwriting improved, investments did not

The net insurance service result before reinsurance contracts held was 1 070 against 852. A net expense from reinsurance contracts held of 622, against 627, left an insurance service result of 448 against 225. That is the largest year on year movement in the announcement, and the directors tie it to momentum across both the life and general insurance businesses and to disciplined cost management. They also state plainly that the general insurance business continues to see a high level of claims.

Net investment income fell to 1 677 from 2 168. Net insurance finance expenses were 1 066 against 1 253, so the net insurance and investment result was 1 059 against 1 140. The improvement in underwriting was not enough to offset the fall in investment income once the associated finance expense is netted off.

Below that, revenue from contracts with customers was 192 against 324. Non-directly attributable insurance costs and other operating expenses rose to 758 from 682, which the directors attribute to a systems migration they describe as a one-off investment intended to give customers newer tools and technologies. Bancassurance obligations were 96 against 92.

Profit before taxations from continuing operations was 397 against 690. After taxation of 166 against 262, total earnings from continuing operations were 231 against 428. There were no discontinued operations this time, against a loss of 168 in the comparative period, so total earnings were 231 against 260 and total comprehensive income 231 against 195.

Earnings per share therefore read two ways. From continuing operations they fell to 0.43 from 0.80. On total earnings attributable to shareholders they were 0.43 against 0.43, unchanged, because last year’s continuing-operations figure was reduced by the discontinued loss.

Balance sheet and cash

Group total assets were 48 888 at 30 June 2026, against 45 338 a year earlier and 46 306 at the December year end. Financial investments, the source of the income that fell, grew to 34 864 from 29 676 and from 33 173 at December. Cash and cash equivalents were 9 269 against 10 315 and 8 273.

On the liability side, insurance contract liabilities rose to 22 516 from 20 654 and from 20 792 at December, and financial liabilities under investment contracts to 13 420 from 11 546 and 12 441. Total liabilities were 38 845 against 35 485.

Total equity was 10 043 against 9 853 a year earlier and 10 080 at December. The statement of changes in equity shows the movement in the period: total comprehensive income of 231, a transfer between reserves of 50 into the statutory and owner occupied properties reserve, and dividends paid of 268. Retained surplus closed at 5 510 from 5 597.

Cash flow from operating activities was 1 276 against 677, and financing outflows were 280 against an inflow of 530, giving a net increase in cash of 996 against 1 206.

Products, capital and outlook

During the period the group launched HeriAfya Seniors and HeriAfya Juniors to complement its HeriAfya medical retail offering, and enhanced its LifeVest investment solution to combine long-term wealth creation with expanded insurance protection, including critical illness and permanent total disability benefits.

The directors say the group remains financially resilient and well capitalised with capital levels above regulatory requirements. The announcement gives no capital adequacy ratio, so the statement cannot be checked against a number here.

On prospects, the directors point to a stable exchange rate, accommodative monetary policy and positive economic growth expectations, set against fiscal consolidation pressures, constrained household disposable incomes, a high level of public debt, and climate and geopolitical risks.

The results were signed by group chief executive officer K Godden and chairman R Etemesi on 17 August 2026. Continuing disclosure by listed Kenyan issuers runs through the Capital Markets Act and the regulations published by the Capital Markets Authority, including the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023.