eBusiness Weekly
BH24 Reporter
HARARE – Old Mutual Zimbabwe posted an operating profit of $34, 3 million, a jump of 27 percent for the six months period to June 30, 2018.
Speaking at an analysts briefing yesterday, 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 banking and 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 volatility experienced in investment returns,” said Mushosho.
During the 2018 half year briefing session, Mushosho 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 for the asset management business went up by 38 percent from $2, 1 billion in the first half of 2017 to $2, 9 billion as at 30 June 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 explained that, 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 to cash.” added Mushosho.
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 compared to 2017.
“The decline in Headline 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,” said the CEO.
