Old Mutual lifted its interim dividend 6% to 34 cents a share over the same time last year due to a stronger performance by South African equities and its strategy to invest in new growth engines, including the launch of a new “status quo changing” bank early next year.
Adjusted headline earnings grew by 3% supported by a robust 14% increase in shareholder investment returns. Adjusted headline earnings a share rose by 7% to 73.5 cents, boosted by the R1.5 billion share buy-back in 2023.
“We are pleased with the solid performance delivered while investing for the future,” CEO Iain Williamson said in a statement yesterday at the release of the interim results.
He said progress on strategic delivery provided an edge to their performance, and moves to launch a new bank were progressing “very well” and were set to “shake up the status quo”.
Industry testing and integration into the National Payments System was complete. Technical and operational progress was ahead of schedule, and the remainder of the year would focus on refining the bank systems and capabilities before a public launch.
Pending remaining Section 17 regulatory conditions, the public launch was anticipated in the first quarter of 2025, he said.
Recently Old Mutual announced the proposed appointment of Clarence Nethengwe as CEO-designate of OM Bank, effective November 1, subject to regulatory approval. Nethengwe is a long-standing executive of Old Mutual and had been an early advocate of the group’s Integrated Financial Services strategy.
Other strategies implemented in the six-month period included accelerating the digital modernisation programme to retire legacy IT estates and drive efficiencies, as well as the Old Mutual Africa Regions perimeter review.
After this review, Old Mutual exited its Life and General Insurance businesses in Nigeria and Tanzania, enabling it to focus on the markets where it believed it can achieve strong growth and achieve an ambition to be a top three player.
The results for the six months to June 30 showed adjusted headline earnings per share increasing 7% to 73.5 cents, bolstered by the R1.5bn share buy-back executed in 2023.
Group return on net asset value increased by 70 bps to 12.6%, driven by the growth in earnings and capital optimisations. A further R1bn share buy-back was proposed for 2024.
“We delivered strong cash generation, optimised shareholder value and sustained top-line growth as we continue towards our goal of becoming Africa’s largest and best-integrated financial services provider,” said Williamson.
Old Mutual Insure reported a turnaround through better risk selection and expense management. Premiums grew 10% after solid channel productivity, while net underwriting results increased by more than 100%.
The Mass and Foundation cluster reported strong sales growth of 14%, with a multi-channel strategy continuing to bolster market share and support margins.
Personal Finance and Wealth Management grew sales by 8%, following higher guaranteed annuities and recurring premium savings sales. Assets under management were up 3% after benefiting from market performance in SA.
Old Mutual Africa Regions, ignoring currency movements, reported a 17% rise in gross written premiums and life sales increased by 5%. Significant currency depreciation and inflation in the Africa regions added strong headwinds to the group operating environment in the six months.
Williamson said positive investor sentiment in South Africa following the general election, along with the recent policy rate cut and further possible cuts expected later in the year, had reset the base case for growth.
BUSINESS REPORT