OLD Mutual Zimbabwe has set June as the deadline to release a timeframe and details towards finalisation of the group’s managed separation of its business units.
BY TATIRA ZWINOIRA
This came as the group seeks to reduce regulatory costs and increase synergies between the different business units namely, Old Mutual Asset Management business in the United States, Old Mutual Wealth in the United Kingdom, Nedbank in South Africa, and Old Mutual emerging markets.
Speaking on the sidelines of an Old Mutual Zimbabwe’s analysts briefing in Harare on Wednesday, Old Mutual group chief executive officer Jonas Mushosho said the regulatory costs as a diversified conglomerate were too high.
“There was a realisation that the regulatory costs of a diversified conglomerate like ours were to huge because most regulators are requiring additional capital to be held to cover operational risks in a conglomerate like ours,” he said.
“In addition, there was a realisation that the different main businesses that is Old Mutual asset managers in the United States, Old Mutual wealth in the United Kingdom, Nedbank in South Africa, and Old Mutual emerging markets do have little synergy between them.”
He added: “Therefore, the businesses trade at a conglomerate discount. You need to find a way for unlocking shareholder value. So the managed separation will involve or the end stage will be four separate businesses: the asset management business in the United States, the wealth management business in the United Kingdom, Nedbank and Old Mutual emerging markets.”
Mushosho said details and timeframes on how this would be done will be announced in June.
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The group posted a 5% increase in its adjusted operating profit to $76 million for the financial year ending December 31 from $71, 8 million over the same period the previous year.
Total revenue increased by 6% to $203, 8 million by the end of 2015 from $192, 3 million over the same time frame the previous year. Total expenses grew 5% to $182, 2 million from $180 million the previous year on the back of an increased investment in its bank branches in its banking division under CABS.
CABS managing director Simon Hammond said the bank had increased its liquidity ratio to 45% from the average minimum of 30% which helped them to lend more.
“In 2013, and 2014 we took a conservative approach to lending. We increased our liquidity ratio to 45% from the minimum of 305 so that also contributed to that (loans). We have continued to grow our mortgage,” Hammond said.
Loans and advances by the end of 2015 increased to $563, 1 million a 27% increase from a previous of $443, 5 million over the same timeframe.
Old Mutual subsidiaries in Zimbabwe includes RM insurance, CABS, Old Mutual custodial services, Old Mutual Securities, Old Mutual Unit Trust, Old Mutual Investment Group, and Old Mutual Life Assurance.
