Old Mutual mulls changes to personal finance business after profit decline

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Group misses operational targets first set of results as a standalone entity following the group’s split into four units in 2018

Old Mutual’s share price fell to its lowest level in six months as the group missed its full-year operational targets in its first set of results as a standalone entity following the group’s split into four units in 2018.

“There’s still a lot of work to do in the personal finance business. Competition remains intense. But I believe that the actions we are taking are the right management actions. I am confident they will turn the situation around,” said Old Mutual CEO Peter Moyo. Warwick Bam, head of research at Avior Capital Markets, said despite troubles in the personal finance business, Old Mutual delivered on everything under its control. Excluding the impact of foreign currency adjustments on its Zimbabwe business, for example, Old Mutual’s adjusted profits would have risen 1% year-on-year.

Old Mutual reported marked progress on retaining its leading position in its business serving the mass market. The mass market business life insurance grew sales by 12% to R4.5bn, while and loans and advances grew by 37% to R16.5bn. At 31% the mass and foundation cluster contributes the biggest share to the group’s operating profits.

 

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