Johannesburg - Old Mutual's chief executive Julian Roberts says he stands by the group's South African interests, but will initially focus on the problem areas in the group.
In a telephone conference Roberts declared the South African subsidiaries Nedbank and Mutual & Federal (M&F) as "very good business units".
"Together with the international interests there is great potential to move forward."
He indicated that there were possible differences of emphasis in his management style compared with that of his predecessor, Jim Sutcliffe.
These involve less decentralisation, with greater operational control so as to avoid problems such as experienced by the US life interests.
In the past, analysts said that Old Mutual was managed to loosely, which is exactly what led to the problems.
In a research note, Rand Merchant Bank/Morgan Stanley said that the problems in the life interests show that a change in strategy is needed. One of the more radical options is separation of the international and South African interests.
Old Mutual's major South African interest is its 51% stake in Nedbank.
"This would be very difficult to effect successfully."
In the past, the South African interests were an important source of cash flow for Old Mutual's international expansion, especially in the case of Skandia. In the most recent half-year to the end of June, because of the volatile markets, Old Mutual's net cash flow fell sharply by 73% to £3,2bn (about R44bn).
Analysts stress that, against Old Mutual's overall capital surplus of £1,5bn (about R21bn), the problems at US Life are small. The big problem lies with management credibility and the choices that Sutcliffe made.
These include the failed attempt to sell M&F to the Royal Bafokeng Group.
Senior management has repeatedly denied that Nedbank is in the market, but it's an open secret that audit studies of the banking group have already been done. Old Mutual was unwilling to take it further because of the relatively low valuation.
Another problem is that the Reserve Bank's banking registrar would not sanction an offshore sale.
The American life interests now causing the problems are, ironically enough, the old Sage business, which was taken over in 2003 and managed as Old Mutual Bermuda.
Skandia has been the largest acquisition to date. Old Mutual shelled out $6.5bn (now worth about R52bn) for this problem child, and Roberts largely made a success of it before the markets started to collapse.
Roberts has indicated that he is prepared to make difficult choices to resolve the problems in the US. This could, however, occupy all his time for the next six months.
Old Mutual's share price closed 18c weaker on Thursday afternoon at R13.72.
- Sake24