New Zimbabwe.com

Old Mutual records half year operating profit growth of 27% to hit $34.3 million

By Business Reporter

OLD Mutual Zimbabwe has announced an operating profit of $34.3 million representing growth of 27% for the first half of 2018.

Speaking to analysts during the company’s half-year analyst briefing session Tuesday, Jonas Mushosho, who is Old Mutual Zimbabwe and Old Mutual Rest of Africa CEO, 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% from $27 million to $34.3 million driven by growth in our banking and asset management profits,” said Mushosho.

“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.”

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% upsurge to $2.9 billion.

“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 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% from $3.7 million to $6.8 million.”

The Old Mutual Group CEO also explained that CABS, their banking arm, recorded growth in loans which increased by 29%.

“Loans and advances grew by 29% to $765.1 million driven by growth in mortgages, salary based loans to individuals and loans to corporates,” he said.

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.

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.