Evan Vitale Consulting: Old Mutual champions Africa business

Thursday, August 6, 2015

Old Mutual champions Africa business – CNBC

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Old Mutual has reported a 20 percent rise in adjusted operating profit for the first half of 2015, as the CEO championed growth in African markets.

The financial services, banking and insurance group reported a 14 percent rise in profits out of South Africa, and a 31 percent profit increase in the rest of the continent.

At constant currencies, adjusted operating profit hit £904 million ($1.4 billion) for the first six months of the year.

“We can keep that momentum up. I see the emerging markets still being a huge growth impact,” Old Mutual CEO Julian Roberts told CNBC Tuesday morning.

Though low commodity prices have put a strain on emerging market consumers, Roberts said there was little to worry about in terms of business growth and it was “far from a liability.”

Even depreciation of the South African rand — down over 13 percent against the dollar over the past six months — has been outweighed by “reasonable GDP,” Roberts said.

“When you look at the overall growth from our emerging markets, you can factor in a degree of depreciation of the currency and still produce good value for shareholders.”

Roberts also praised performance in the developed markets, where UK profits were up 26 percent, when including recent European divestments and the recent takeover of investment services firm Quilter Cheviot.

“At the end of the day, our businesses are running extremely well. The UK business is running from strength to strength,” Roberts said.

The group raised their dividend to 2.65 pence, up from 2.45 pence

Roberts, who announced he would be stepping down back in April, will be succeeded by Bruce Hemphill on November 1. Hemphill is expected to focus on boost the group’s African business – he joins Old Mutual from Standard Banking Group, the continent’s largest banking group by assets and earnings.

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