eBusiness Weekly
Tawanda Musarurwa
HARARE – Zimbabwe’s biggest financial services group, Old Mutual Zimbabwe posted a ‘significant’ 139 percent increase in after tax profit to $219 million for the year to December 31, 2017 from $93 million previously.
The improved profitability came on the back of a robust performance across the group’s various operations, as well as returns from a number of non-banking investments mainly on the local bourse, said chairman Johannes Gawaxab in a statement accompanying the results.
“The growth in investment returns was mainly due to the group’s exposure to listed equities as the Zimbabwe Stock Exchange recorded significant gains with the ZSE Industrial and Mining Indices closing 2017 with full year gains of 130, 42 percent and 143, 38 percent, respectively,’ said the chairman.
Total revenue rose by 7 percent to $351, 1 million with gross premiums increasing by 5 percent to $194, 8 million from $185, 4 million in total for the life and short term insurance businesses.
The group attributed the growth in premiums to a combination of improved client retention and new businesses underwritten.
The banking business recorded a net surplus growth of 7 percent to $42, 1 million up from $39, 2 million in the previous year.
Operating and administration expenses increased at a lower rate of 5 percent to $93, 8 million from $89, 4 million in the prior comparable period.
The group’s total asset base also increased by 45 percent to $3, 1 billion from $2, 2 billion, which was driven by growth in investment and securities, loans and advances, and cash and cash equivalents.
Funds under management for the asset management business grew by 50 percent from $1, 8 billion to $2, 7 billion.
Looking ahead, management said focus will be on exploiting new opportunities for growth, financial inclusion, operational efficiencies as well as building digital capabilities.
In respect of key operational outputs, Old Mutual completed the construction of the Kupinga Hydro Power Plant, which it financed. The plant is currently supplying 1, 6 MW of power onto the national grid.
Also during the period under review, the group launched Old Mutual Finance, a credit only microfinance business, which commenced operations in May, 2017. Management says OMF “had made notable progress in growing its customer base and it is expected to play an integral role in driving financial inclusion through the provision of financial services to market segments previously not serviced by traditional financial institutions.”
Meanwhile, management has proposed a special dividend of $10 million on top of a normal dividend of $10 million.
