Old Mutual is set to launch its bank in the first quarter of 2025, as the financial services company aims to meet regulatory duties during the remainder of the current year.
“I am proud of the continued progress in the disciplined execution of our strategy and considered capital allocation,” said Old Mutual CEO Iain Williamson in the group’s financial results for the six months ended 30 June 2024.
This, he said, has translated into the successful completion of industry testing and integration of OM Bank into the National Payment System in line with the Prudential Authority’s section 17 conditions.
'Unlocking new growth engines'
"Our South African bank initiative, OM Bank, remains a key priority of our strategy to build an integrated financial services business. The technical and operational progress is ahead of schedule, with successful industry testing and integration into the National Payments System already completed," said Williamson.
"Pending the remaining Section 17 regulatory conditions, unrelated to technical readiness, we anticipate the public launch in Q1 2025. For the rest of the year, we are focused on meeting the remaining Section 17 conditions and continue refining systems and capabilities to ensure a seamless launch," he said.
The financial services group said that Clarence Nethengwe had been appointed CEO-designate for the new bank. Subject to regulatory approval, he will take up the role on 1 November.
Results
Old Mutual announced its unaudited interim results for the six months ended 30 June 2024, showcasing a robust performance amidst challenging market conditions.
Adjusted headline earnings, a key metric for distributable earnings, increased by 3%, driven by a 14% rise in shareholder investment returns due to improved performance in South African equities.
Adjusted headline earnings per share rose by 7% to 73.5 cents, supported by a R1.5 billion share buyback executed in 2023.
Financial Highlights
Return on Net Asset Value: Increased by 70 basis points to 12.6%, with a 210 basis points rise to 15.5% excluding new growth initiatives.
Life Sales: Grew by 6%, with gross written premiums up by 9%.
Funds Under Management: Increased by 5% to R1.4 trillion.
Net Client Cash Flow: Improved by 56%, reflecting a positive turnaround in Wealth Management.
Positive investor sentiment following South Africa’s general election and anticipated policy rate cuts set a favourable growth base in the second quarter.
Despite low business and consumer confidence, there was a slight improvement. However, significant currency depreciation and inflation in African regions posed challenges, the group said.
Old Mutual said it continued to invest in new growth engines and technology modernisation to future-proof the business.
The Old Mutual Board declared an interim dividend of 34 cents per share, reflecting a 6% growth and a dividend cover of 2.0 times, supported by strong liquidity levels and a well-capitalised balance sheet.
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