Old Mutual Zimbabwe H1 net profit up 23%

OLD MUTUAL Zimbabwe after tax profit for the six months to June was up 23% to US$13 million buoyed by strong performance from the group’s banking and insurance business, the company reported on Wednesday.

Basic earnings per share rose to 3,8 cents from 2,8 cents.

Old Mutual Zimbabwe, the local unit of Old Mutual Plc owns market leader Old Mutual Life Assurance and CABS, the country’s largest mortgage lender and is second largest financial institution by deposits.

Other Old Mutual subsidiaries include Old Mutual Securities, Old Mutual Property, Old Mutual Investment Group and Old Mutual Custodial Services.

At US$126 million, group revenue was up 4% despite losses in equity and investment property losses. The group, which owns some of the premier properties across the country, has been hurt by voids and defaults affecting the property sector.

Life business premiums, the company said grew by 3% driven by an increased distribution network.

The under-performance of the Zimbabwe Stock Exchange which saw the equities market shedding nearly US$2 billion in September on a year-on-year basis also affected the performance of the group’s investment portfolio.

Banking interest and similar income increased to US$50 million from US$35 million as the group’s banking institution CABS upped its credit at a time other financial institutions took a conservative approach.

“The banking business registered an increase of 24% on its surplus to US$8,9 million. Loans and advances, interest income and deposits also registered significant increases above 35%,” chief executive Jonas Mushosho said in a statement accompanying financials.

“Premium income in the short term business went up 17% on the back of increases in banc assurance income. Fee income and adjusted operating profit in the investment business went down due to depressed market performance.”-Staff Writer

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