SA's biggest insurer Sanlam said on Friday that profits for its year to end-December could fall by as much as a quarter, partially due to the recognition of a R1.7bn expense related to a BEE transaction.

The group had issued about 111-million shares at a price of R70 per share to a special-purpose vehicle in early 2019, saying on Friday that that had resulted in a one-off expense of R1.7bn.

Headline earnings per share (HEPS) are expected to fall by between 15% and 25% from the prior period’s 445.6c.

Earnings attributable to equity holders for the year were further hit by the profit on deemed disposal of Saham and Nucleus of R2.8bn in 2018, the group said.

Sanlam said on Friday it had achieved satisfactory growth in its net result from financial services as well as investment return earned on its capital portfolios for the 2019 financial year, contributing to estimated combined growth of between 8% and 18% from these sources of earnings.

In early afternoon trade on Friday, Sanlam’s share price was down 4.12% to R64.05, having fallen 15.90% over the past 12 months.

gernetzkyk@businesslive.co.za