Old Mutual’s short-term growth prospects will not be severely harmed if its planned acquisition of Swedish insurer Skandia fails to materialise. This is according to Julian Roberts, the group’s financial director.
Roberts spoke to the Mail & Guardian after the group unveiled its interim results for the six months to June.
Roberts pointed to the group’s organic growth.
“The [United Kingdom] and [United States] are growing well.If one opportunity does not go forward, another will come up,” he said.
The group delivered results that were slightly better than market expectations. Operating profit rose from R5,1-billion to R6,4–billion.
This was driven by growth in funds under management from R1,5-trillion to R1,9-trillion.
The group’s US business alone experienced inflows of $20-billion in the first half of the financial year, which takes funds under management in the region beyond $200-billion.
South Africa remains an influential contributor to profit, contributing 85% of these results.
Eleven percent of local operations was recently sold to empowerment partners.
Old Mutual has also bitten the bullet and committed itself to losing R225-million as it offers customers an option to switch from its Flexi and Horizon products to Max investments, which have lower costs and investment flexibility.
The option to switch comes in the wake of a series of rulings against life companies by the Pensions Fund Adjudicator relating to costs.
However, Roberts maintains that the group “is acknowledging that there is an issue [around costs] and we are fixing that issue”