* 2010 pretax profit 2.9 bln shillings vs 334 million loss
* Investment income 4.7 bln shillings vs 196 million
* Investment income growth to slow on bearish stock markets
* Company plans IPO by June (Adds managing director quote, background)
By Kevin Mwanza
NAIROBI, March 23 (Reuters) - British American Kenya, which aims to list as a publically traded company, expects its investment income growth to slow this year due to a bear run on the stock market.
British American, a holding company for two insurance firms and an asset manager, swung to a profit in 2010 due to surging investment income which jumped to 4.7 billion shillings from 196 million the previous year.
That growth came as the benchmark NSE 20 Share Index rose 36 percent last year. Since the beginning of this year, the index has fallen 13.2 percent.
"We however do not expect as high a growth in investment income in 2011 as we experienced in 2010," said British American managing director Benson Wairegi.
"We are optimistic that (profit) growth prospects will be in the region of 30-40 percent," said Wairegi.
Pretax profit in 2010 was 2.9 billion shillings ($33.86 million) from a 334 million shilling loss the year before.
"The stock market might be down but we think it would pick up," he added.
The company said it expects its asset under management to grow by 73 percent to 30 billion shillings in 2011.
British American plans to raise 6-7 billion shillings in an initial public offering (IPO) on the Nairobi Stock Exchange by June, subject to approvals by shareholders and the regulator.
"The IPO is expected to give British American an opportunity to increase the scope of its operations and widen its footprint," Wairegi said.
He said the company did not expect its new businesses in other east African countries to contribute much to its revenue this year as the subsidiaries were still being set up.
The company -- which holds an 11 percent stake in Equity bank and a 15.9 percent in mortgage firms Housing Finance -- also operates in Uganda, and has said it plans to spread to south Sudan, Tanzania and Rwanda.
Insurance is seen as a growth area due to low levels of penetration. Only about 7 percent of the 40 million people in east Africa's biggest economy are covered by any form of insurance.
Kenyan health insurer Resolution Health, majority owned by Africa Development Corporation, which reported a 47 percent growth in pretax profit to 207 million shillings on Tuesday, said it plans to acquire at least two insurance firms in east Africa this year.
Private equity funds are growing their footprint in Kenya's private healthcare sector to serve the country's growing middle class.
For a factbox of upcoming share offers in east Africa, click on:
For a previous interview with Wairegi, click on:
(Editing by Erica Billingham)