The boom in money market funds (MMFs) offering double-digit returns in 2024 helped financial services firms post record profits during the year.
Financial statements from several firms show income growth of over 100% for the period ending December 31, 2024. At their peak, MMFs offered returns as high as 17%, driven by high interest rates on government Treasury bills and bonds.
However, with the Central Bank of Kenya (CBK) lowering the base lending rate, returns on Treasury bills have now fallen below 10%, pushing MMF returns down to as low as 7%.
Despite this shift, some asset managers still saw significant gains. CPF Asset Managers bounced back from a Sh10.1 million loss recorded over the 15 months ending December 2023 to post a Sh1.4 million profit in 2024.
CIC Group, the parent company of CIC Asset Managers, grew its assets under management by Sh6 billion during the year. “Our customer service index stood at 86%, with over 7,000 agents and brokers managing assets worth more than Sh152 billion across MMFs and pension funds,” said CIC Group Managing Director Patrick Nyaga during the company’s recent financial results release.
CIC Asset Management’s profitability grew by 7%, with profit before tax rising from Sh704 million to Sh753 million. The company credited this growth to an improved customer experience, including a newly launched mobile app.
Meanwhile, Jubilee Asset Management Ltd and Jubilee Unit Trust Collective Investment Scheme reported a post-tax loss of Sh42.1 million. However, the Jubilee Money Market Fund saw a remarkable surge in returns, rising to Sh396 million—a staggering 704% jump from the Sh49.2 million recorded in 2023. Total MMF income climbed from Sh64.4 million to Sh462.8 million over the same period.
Jubilee’s new dollar-denominated MMF, recently licensed by the Capital Markets Authority (CMA), also showed promising results, reporting a Sh21.8 million profit for the six months ending December 31, 2024.