Africa Growth, UK Business Boost Old Mutual Sales

Posted on :Friday , 6th November 2015

Old Mutual [JSE:OML] on Wednesday posted strong third quarter results with gross sales up 31% to R172.53bn.

Investors initially cheered the news, sending the share price up over 3% to reach a new record high of R47.15. However, by 16:30 the shares were changing hands up only 0.57% at R45.89 from the previous close.

Old Mutual Emerging Markets delivered a strong performance, despite weaker economic conditions in South Africa, the company said in a trade update for the three months to end-September. Gross sales were up 22% to R52.8bn.

Rest of Africa gross sales were 32% higher than the third quarter of 2014 due to "strong asset management flows in Kenya and Malawi, increased sales advisers and strong credit life sales in Zimbabwe, and positive foreign exchange impacts", the insurer said.

The UK-based insurer said Old Mutual Wealth continued to benefit from its vertically integrated model and the acquisition of Quilter Cheviot. Gross sales were up 45% to R117.15bn, the highest the business has recorded in one quarter.

Old Mutual's Asset Management division also performed well in a difficult third quarter in equity markets, the group said. The division's funds under management ended the period at R2.88trn, down 5% on the year end due to challenging markets during Q3.

Old Mutual's majority-owned banking subsidiary Nedbank [JSE:NED] delivered a resilient performance for the nine months ending September 30 2015. Net interest income increased 4% to R17.7bn, supported by annualised growth in average interest-earning banking assets of 10.4%.

In its outlook Old Mutual said it expected exchange rate movements to temper sterling reported growth and that conditions for emerging markets would remain challenging.

"We are confident that if we continue to focus on meeting our customers' needs and improving operating efficiencies we

can continue to deliver sustainable growth," the company said.

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