Good start to the year for Old Mutual

Cape Town - Insurance giant Old Mutual on Thursday reported a good start to the year, with businesses performing well with continued strategic progress.

Gross sales of financial services company Old Mutual [JSE:OML] was up by 18% to £7.3bn for the first quarter ending March 31 2015.

Old Mutual Emerging Markets was up 20% at £2.7bn and Old Mutual Wealth was up 16% at £4.6bn.

The net client cash flow (NCCF) of £0.5 billion was similar to the first quarter of 2014, with Old Mutual Emerging Markets at £0.6bn, Old Mutual Wealth at £1.0bn and OM Asset Management at £(0.1)bn.

Funds under management (FUM) were up 10% to £351.4bn and Nedbank had a strong quarter with non-interest revenue up 18% and net interest income up 4%.

Among the strategic developments highlighted for the first quarter are the completion of the acquisition of Quilter Cheviot and the completion of the acquisition of 23.3% of East African financial services company UAP and an agreement to acquire a further 37.3%.

The disposal of Old Mutual Wealth businesses in France and Luxembourg has also been completed.

Group CEO Julian Roberts said in a statement Old Mutual is fully focused on operational execution "as we look to secure the returns from the investments we have made to transform the group".

“We continue to grow our franchise in emerging markets. It is particularly pleasing to see strong sales from our largest market of South Africa. Nedbank has had another excellent quarter with good growth in non-interest revenue."

Gross sales elsewhere in Africa grew by 34%.

“Old Mutual Wealth has had a solid start to the year and we are seeing continuing benefits from the vertically-integrated model, with Intrinsic and Quilter Cheviot performing well," said Roberts.

"Reflecting this, platform sales were up 15%, pension sales up 40%, ISA sales up 20% and FUM were over £100bn at the quarter end."

He pointed out that, despite a small net cash outflow in the quarter, OM Asset Management generated positive annualised revenue as a result of flows into high-margin global, non-US and alternative products.

“While economic growth remains relatively weak in South Africa, our businesses continue to deliver good performance.

"We believe our vertically-integrated UK model is well positioned to take advantage of the changes to the UK pension regime. Overall we expect continued sound performance for the current year,” said Roberts.