Old Mutual is set to launch its bank in Q1 2025, with the group set on meeting regulatory conditions in 2024.
“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 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.”
He said the South African bank initiative, OM Bank, remains a crucial priority of the group’s strategy to build an integrated financial services business.
He added technical and operational progress is ahead of schedule, with successful industry testing and integration into the National Payments System already finished.
“Pending the remaining Section 17 regulatory conditions, unrelated to technical readiness, we anticipate the public launch in Q1 2025,” said Williamson.
“For the rest of the year, we are focused on meeting the remaining Section 17 conditions and refining systems and capabilities to ensure a seamless launch.”
The group previously said it expected to launch the bank sometime in 2024.
Old Mutual recently announced that Clarence Nethengwe has been appointed CEO-designate for the new bank. Subject to regulatory approval, he will take up the role on 1 November.
The new bank is set
Looking at the group’s financials, Williamson said he was pleased with the strong performance.
Adjusted headline earnings, an essential metric for distributable earnings, grew by 3%, supported by a 14% increase in shareholder investment returns due to improved performance in South African equities.
Adjusted headline earnings per share increased by 7% to 73.5 cents, bolstered by the R1.5 billion share buyback executed in 2023.
The group thus upped its by 6% to 34 cents per share.
“Positive investor sentiment on South Africa following the general election outcome and the forecasted policy rate cuts reset the base case for growth during the second quarter of the period under review,” said Williamson.
“While business and consumer confidence remains low, there has been a slight improvement in the period. Significant currency depreciation and inflation in our Africa regions added strong headwinds to the operating environment.”
The group increased its life sales by 6% and gross written premiums by 9%, with positive market performance leading to a 5% rise in funds under management.
Outlook
| Financials | H1 2023 | H1 2024 | % Change |
| Results from operations (Rm) | 4 366 | 4 243 | -3% |
| Adjusted headline earnings per share (cents) | 68.8 | 73.5 | +7% |
| Basic earnings per share* (cents) | 96.7 | 120.2 | +24% |
| Headline earnings per share* (cents) | 96.8 | 133.6 | +38% |
| Interim Dividend (cents) | 32 | 34 | +6% |
We are encouraged by the cautiously optimistic outlook in South Africa following the formation of the Government of National Unity,” said Williamson
“Growth is expected to be muted with GDP forecasted between 1% and 1.4%.”
“Moderate inflation outlook and the 25 bps rate cut, the first since 2020, ushering in an interest rate easing cycle from the latter half of the year should bolster consumer spending, alleviate pressure on households’ disposable income and boost sentiment.”
“The outlook for our Africa regions suggests a challenging yet slightly improved economic environment.”