Publications
Partners
Cape Town - Sanlam announced adjusted return on group equity value per share of 15.8% for the financial year ending 31 December 2017.
This exceeded its target of 13.2%, the group said on Thursday.
Net result from financial services per share increased by 7% (up 10% in constant currency); normalised headline earnings per share was up 18%; and the dividend per share increased by 8.2% to R2.90 per share.
Overall, the group redeployed a net total of R2.8bn in 2017 in respect of new and bolt-on transactions.
Sanlam's financial director Heinie Werth told Fin24 that the group has shown a pattern of double digit average growth over time.
"We are pleased that, notwithstanding the economic and political situation in SA last year, Sanlam again shows excellent results. We are really pleased about how we grew the value of new business in these difficult times," said Werth.
In his view, this was achieved by selling the right products at the right margins.
"Looking forward, we are cautiously optimistic about conditions in SA. The mood in the country is more positive than six months ago. Zimbabwe is also in a better position than a year ago, while the Indian economy is doing well too. So, we are reasonably optimistic," he said.
SAHAM deal
Sanlam announced on Thursday that it has reached an agreement to purchase the remaining 53.37% shareholding in SAHAM Finances for $1 050m. The transaction is subject to certain conditions including various regulatory approvals.
Sanlam and its general insurance subsidiary Santam first acquired a joint 30% stake in SAHAM Finances in February 2016 and a further 16.6% in May 2017.
SAHAM Finances is one of the largest insurers in Africa and is the market leader in most of the 26 countries in which it operates in North, West and East Africa as well as in the Middle East. The company owns 58.48% of SAHAM Assurance Morocco, which is listed on the Casablanca Stock Exchange.
Following the conclusion of this transaction, the Sanlam Group will own 100% of SAHAM Finances. According to the group this will firm its position as the largest non-banking financial services group in Africa.
"It has always been our strategy to be a real pan-African player. It is a good complementary fit and provides a nice diversified option to our shareholders including international investors.," Werth commented about the deal.
"We believe in the African story. The continent always offers a nice mix. Each country and jurisdiction are different and not all African countries will react in the same way. Our holistic pan-African strategy is to look at a diversified portfolio," said Werth.
"There are many banks and brokers working across African countries and we can now offer them products across borders with our wide footprint."
Werth said that, going forward, the group would now have to deliver on the deal and grow the businesses.
"I am confident that we can do that over time, because we have already been involved in the African story for the past 12 years," he said.
Global view
As for the rest of the world, Werth said India remains a focus for the group.
"Because of the SAHAM deal, we decided to stop looking at more businesses in Southeast Asia. We will keep Malaysia and work on delivered bigger return there," said Werth.
Overview
According to the group, low investor confidence in SA had a negative effect on the industry.
Although the group's new business volumes declined by 1% to R230bn, Werth said he is pleased with the results, given the uncertainties in SA last year. The group's competitors show the same trend.
"The higher end of the market was cautious to do more investments, but we expect a turnaround in this regard later this year given the new optimism in the country. The real story lies in the fact that new business grew 15%," explained Werth.
Sanlam Personal Finance (SPF) once again delivered a solid performance, also in growth in terms of new business, said Werth.
"We are a big business in SA. So, for them to grow like this is a terrific achievement. Last year we had a huge focus on building out product lines where we did not have a fair market share."
As for Sanlam Investments (SI), it had the best year ever in institutional flows, according to Werth, although it was also more impacted by lower individual flows.
Santam Specialist experienced competitive trading conditions and was impacted by catastrophic events in 2017 like the Knysna fires and flooding in the Cape and KwaZulu Natal. In Werth's view, the unit still did well in a difficult environment.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
