Harare – Old Mutual Zimbabwe reported an operating profit of $34.3 million from 27 million prior year representing a 27 percent growth for the first half ending June 30, 2018.
Addressing analysts in the capital Tuesday, Old Mutual Zimbabwe CEO, Jonas Mushosho attributed the increased growth in operating profit to strong performances from the Group’s banking and asset management arms.
“Old Mutual Zimbabwe’s operating profit increased by 27 percent from $27 million to $34.3 million driven by growth in our asset management profits.
“CABS’ profits were driven by growth in both net interest income and net non-interest income. The asset management’s performance was driven by higher fees on the back of growth in funds under management.
“The strong growth in operating profits highlights the performance resilience of the core business operations, notwithstanding the vitality experienced in investments returns,” said Mushosho.
The Group’s CEO also revealed that the diversified financial services company’s funds under management had achieved an impressive 38 percent upsurge to $2.9 billion.
“Funds under management business went up by 38 percent from $2.1 billion in the first half of 2017 to $2.9 billion as at June 30, 2018 largely due to growth in net client cash flows (NCCF) and fair value gains on listed equities. As a result of the growth in funds under management, profit before tax for the asset management business increased by 84 percent from $3.7 million to $6.8 million,” he explained.
The Old Mutual Group CEO also said CABS, their banking arm, recorded growth in loans which increased by 29 percent.
“Loans and advances grew by 29 percent to $765.1 million driven by growth in mortgages, salary based loans to individuals and loans to corporates.
“The banking business recorded a net surplus growth of 25 percent to $20.7 million, up from $16.6 million in the first half of 2017. This was mainly due to growth in net interest income on the back of growth in loans and advances and net non-interest income due to the continued use of card based and electronic banking platforms as alternatives,” he said.
“During the period under review, lower comparative gains on listed equities resulted in a Headline earnings decline of 40 percent from 2017 half year figure of $89 million to $53.9 million. The decline reflects a lower investment return on listed equities in the current period, particularly on the insurance business and holding company.
“A cocktail of factors, including but not limited to, investors taking positions ahead elections and profit taking on signs of possible overheating, led to the local stock market struggling for direction during the first half of 2018.
In spite of recent vitality, we believe the stock market will continue to offer a sustainable hedge against environmental risks such as inflation. Equities also provide growth prospects as environment stabilises,” added Mushosho.
Old Mutual is an international pan-African diversified financial services company offering investment, savings insurance and banking solutions.
The company also took the time during the half year briefing to announce that they had repositioned their brand through a brand refresh.
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