Old Mutual separation to benefit market expansion

Old Mutual Zimbabwe has said the separation of parent group Old Mutual Plc will result on specialised focus on the expansion of Old Mutual Emerging Markets (OMEM).

Earlier in March, Old Mutual Plc announced that it would split its businesses into Nedbank, Old Mutual Asset Management, Emerging Markets and Old Mutual Wealth. Old Mutual Zimbabwe falls under the group’s core business – OMEM.

And Old Mutual Zim chief executive officer Mr Jonas Mushosho was recently appointed as regional CEO for OMEM Southern and East Africa.

Mr Mushosho told analysts last week that the managed separation will not negatively affect Old Mutual Zim or OMEM. “Significant progress has been made and arrangements are underway to start some of the implementation that will happen. He (Group CEO Mr Bruce Hemphill) has indicated the businesses that will be sold.

“I think this does offer a very significant opportunity for us (as Old Mutual Zimbabwe) in the sense that Old Mutual Emerging Markets to which we belong is going to be listed as a separate business and it has already been confirmed that the Old Mutual strategy to increase its footprint on the African continent is going to continue. Therefore we believe that exciting times in terms of implementing Old Mutual’s ambition on the African continent is going to receive increased focus during and after the managed separation,” he said.

Old Mutual Plc is in the process of splitting itself into four parts following an earlier strategic review that was carried out which showed that the group faced significant share price discounts due to a conglomerate discount and increased regulatory costs because regulators across the world are no longer in favour of huge financial conglomerates, among other reasons.

In respect of the performance of the four divisions for FY2016, Old Mutual Emerging Markets, reported a 22 percent dip in pretax profit to £260m, while Nedbank reported a 15 percent drop to £345m. Old Mutual Wealth slipped 31 percent to £104 million and Institutional Asset Management recorded a 30 percent drop to £58m.