LONDON (Alliance News) – Old Mutual PLC, the FTSE 100 Anglo-South African financial services company, on Friday said there is “limited rationale” for its four main divisions to be part of the same group, confirming that it intends to separate them by the end of 2018 in a move to cut debt, costs and complexity.
Bruce Hemphill, a former executive at African lender Standard Bank Group, said the review he began when he succeeded Julian Roberts as Old Mutual’s chief executive in November 2015 showed that there is “very little commonality” between the businesses.
The group’s four divisions are comprised of its 54% stake in South African lender Nedbank, an emerging markets business also based in South Africa, a UK-focused wealth arm, and a US institutional asset manager. As Old Mutual manages their separation and sells assets, it will consider returning any excess capital generated to shareholders.
“We have four strong businesses that can reach their full potential by freeing them from the costs and constraints of the group,” Hemphill said.
Confirmation of the plan came as Old Mutual reported higher annual earnings. Adjusted operating profit before tax rose to GBP1.66 billion in 2015, in line with company-supplied analyst consensus forecasts, up 11% at constant currency and 4.0% at actual currency. The company lifted its total dividend per share for 2015 to 8.9p from 8.7p in 2014.
By Samuel Agini; email@example.com; @samuelagini
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