Old Mutual profit growth given boost in equity markets rally

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(Alliance News) – Old Mutual Ltd on Friday said its profitability so far in 2021 has improved due to a strong performance in local equity markets.

The Anglo-South African financial services firm reported results from operations up 48% to ZAR1.81 billion in the first quarter ended March 31 from ZAR1.23 billion a year previously.

Old Mutual revealed that it paid out ZAR2.7 billion for Covid-related death claims in the three-month period, leaving around ZAR1.3 billion in its reserve set aside for the pandemic.

“We continue to closely monitor our claims experience as future waves and their impacts remain uncertain,” the company commented.

Funds under management increased to ZAR1.15 billion, a 3.9% year-on-year rise from ZAR1.10 billion. Old Mutual remarked that the higher FUM provides a “strong asset base on which to earn fees in the second quarter”.

Gross written premiums were increased 2.0% to ZAR5.07 billion, higher than the ZAR4.97 achieved a year prior. The company partly attributed growth to solid customer retention and successful acquisition rates in East Africa and Nigeria.

Looking ahead, Old Mutual commented that the strength of its balance sheet and liquidity would enable it to withstand Covid-induced volatility, and “accelerate growth as opportunities arise”. However, it did caution that subsequent coronavirus waves could place pressure on earnings in the short term.

Shares in Old Mutual were up 0.7% to 1,274.00 pence in London on Friday morning.

By Will Paige; willpaige@alliancenews.com

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