Old Mutual investment returns on listed equities down

Old Mutual investment returns on listed equities down
Published: 23 August 2018 (1771 Views)
Old Mutual Zimbabwe (Old Mutual) has reported that profit after tax tumbled 40% to $53,9 million in the first half of 2018 from $89,3 million in the comparable period last year mainly due to a decline in investment return on listed equities.

Total group revenue also fell 23% to $290,6 million from $378,6 million during the period.

However, operating profit surged 27% to $34,3 million from $27 million, driven by growth in banking and asset management profits.

Notwithstanding the volatility experienced in investment returns, the strong growth in operating profits highlights the performance resilience of the core business operations of the diversified financial services, which offers investment, savings, insurance and banking solutions.

Operating profit by CABS, its banking subsidiary, increased by 13% to $47,7 from $42,2m in the first half of 2017.

The building society reported a 29% growth in loans and advances to $765.1 million driven by growth in mortgages, salary-based loans to individuals and loans to corporates. The banking business also recorded a net surplus growth of 25%, to $20,7 million from $16.6 million in the first half of 2017.

"This (net surplus growth) 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 to cash," the company's chief executive officer Jonas Mushosho said during an analyst briefing on Tuesday.

The banking business recorded a net surplus growth of 25% to $20,7 million up from $16,6 million in the first half of 2017. The performance of the asset management business, driven by higher fees on the back of growth in funds under management.

Funds under management for the asset management business went up by 38% 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 and fair value gains on listed equities.

"The decline in earnings by 40% is largely due to the impact of lower fair value gains on listed equities in the current period, particularly on the insurance businesses and the holding company," Mushosho said.

Mushosho said in spite of recent volatility, the stock market would continue to offer a sustainable hedge against environmental risks such as inflation adding equities will provide growth prospects as the environment stabilises. The group's total assets grew to $3,4 billion from $3,1 billion during the period under review.

During the same period, total liabilities grew to $2,8 billion from $2,5 billion.

- newsday

 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Zimbabwe lost $2 billion on 1:1 forex exchange rate

by Staff reporter | 22 February 2019 | 112 Views

MDC National Council Resolutions

by MDC | 22 February 2019 | 101 Views

'Propaganda' college for Chamisa's MDC

by Ndou Paul | 22 February 2019 | 110 Views

Mnagagwa is a habitual liar

by Don Chigumba | 22 February 2019 | 108 Views

Chiwenga aborts flight to Zimbabwe

by newzimbawe | 22 February 2019 | 136 Views

Grace Mugabe sister's fraud trial hits a snag?

by newzimbabwe | 22 February 2019 | 87 Views

Callistus Ndlovu's body arrives in Harare

by Staff reporter | 22 February 2019 | 87 Views

Baby mama threatens to bewitch ex's wife

by Staff reporter | 22 February 2019 | 87 Views

Dating scam exposed

by Staff reporter | 22 February 2019 | 105 Views

Cholera vaccine campaign begins in Harare

by Staff reporter | 22 February 2019 | 80 Views

American starlet trialing with Bosso

by Staff reporter | 22 February 2019 | 67 Views

Zimbabwe approves 37 mbanje investors

by Staff reporter | 22 February 2019 | 90 Views

'Technology changing face of epidemic'

by Staff reporter | 22 February 2019 | 71 Views

Bosso zero in on three for captaincy

by Staff reporter | 22 February 2019 | 75 Views

Two stabbed, axed in gold rush

by Staff reporter | 22 February 2019 | 87 Views

Bulawayo takes deliberate affirmative action policy

by Staff reporter | 22 February 2019 | 79 Views

Woman arrested for obscene message to lover's wife

by Staff reporter | 22 February 2019 | 82 Views

MDC Alliance members run away with ballot papers

by Staff reporter | 22 February 2019 | 80 Views

Zimbabwe/South Africa officials to meet ahead of Ramaphosa visit

by Staff reporter | 22 February 2019 | 54 Views

Mnangagwa courts Chinese

by Staff reporter | 22 February 2019 | 36 Views

Caps United avert player strike over unpaid dues

by Staff reporter | 22 February 2019 | 37 Views

Fake news rocks Zimbabwe military

by Staff reporter | 22 February 2019 | 44 Views

Ginimbi to 'tour' Australia

by Staff reporter | 22 February 2019 | 41 Views

'Chamisa, Mnangagwa power-sharing not on the agenda'

by Staff reporter | 22 February 2019 | 81 Views

Chamisa cries as his political career ends

by Dr Masimba Mavaza | 22 February 2019 | 105 Views

Abusive Zanu-PF councillor sets wife alight

by Staff reporter | 22 February 2019 | 42 Views

MDC-T supports dialogue with Mnangagwa

by Linda Tsungirirai Masarira | 22 February 2019 | 128 Views

Zimnat assists families of deceased miners

by Staff reporter | 22 February 2019 | 85 Views

2 candidates from the MDC Alliance battle it out in Bulawayo by-election

by Staff reporter | 22 February 2019 | 90 Views

Bulawayo City Council loses $300k in botched deal

by Staff reporter | 22 February 2019 | 89 Views

SA Airways suspends advance bookings

by Staff reporter | 22 February 2019 | 97 Views

Mnangagwa sidelines Chamisa in talks

by Staff reporter | 22 February 2019 | 137 Views

'Chiwenga rushes to Zimbabwe after military purges' - it's fake news

by Staff reporter | 22 February 2019 | 107 Views

Zimbabwe moves to set up super-specialist hospital

by Staff reporter | 22 February 2019 | 80 Views