Old Mutual Zimbabwe Limited has posted an adjusted operating profit of $33,1 million in the half year ended June 30 which is 2% from the same period last year driven by a strong performance of the banking and insurance units.
BY TATIRA ZWINOIRA
Speaking at an analyst briefing in Harare yesterday, Old Mutual group chief executive officer Jonas Mushosho said the uptick in profits was mainly due to the performance of its banking and insurance businesses that contributed 32% and 43% respectively to the group’s total revenue.
“Our revenue grew by 4% which is $126 million and it’s a very good performance when you take into account the environment. This was largely driven by the performance of our insurance and banking business,” Mushosho said.
“The group businesses themselves are well capitalised which is very important in this environment where you are taking in a lot of risk. It is important that you should have a strong capital base, so we are confident that we have a good footing to enable us to go into the future.”
The growth in Old Mutual’s life insurance was attributed to higher premium incomes which came in at $73,1 million up by 3% from the previous time frame last year, and the net client cash flow was up to $27,2 million by 13% from the same time frame in 2014.
The increase was due to good retention strategy and an increased distribution network.
The banking business was spurred on by increased lending and advances as well as higher deposits.
Loans and advances were 41% up from last year to $495,5 million. Deposits were up 36% to $719,6 million.
Mushosho said the growth in the loan book was due to an increase in demand for loans and availability of funds for lending while deposits increased due to the acquisition of new clients.
“We have also taken a very conservative view given the environment in which we are and we have increased the level of provision that we are making in our banking business,” Mushosho said.
He said the group’s strength included strong governance and risk management, operational efficiency, wide integrated distribution network and commitment to creating shareholder and client value.
“We have maintained a very attractive dividend policy which is in line with the Old Mutual PLC policy. We remain very committed to executing our strategy and strategy initiatives,” Mushosho said.
Operating expenses grew to $56,4 million from $45,8 million which Mushosho said was due to strengthening of the capital base of the life insurance and banking units.
He said Old Mutual’s plan for the second half of the year was to focus on defending and extending their core business, capitalising on group synergies, encouraging growth in response to the changing environment and seeking emerging opportunities.