Old Mutual Namibia bounces back

OLD Mutual Namibia rode out the financial storm this year, emerging solid, the company’s results for the first nine months of 2009 show.

Old Mutual’s Managing Director for African Operations, Johannes !Gawaxab, said sales have maintained a positive momentum overall, with particularly strong growth registered in non-life sales. ‘Equity markets have shown good recovery, our operating profit continued to grow whilst our capital position remained solid. Net client cash flow, which was negative at the close of the second quarter of this year, has turned positive,’ !Gawaxab said.Turning to the group’s overall performance, he said Old Mutual’s capital position has improved for the third quarter in a row with a surplus of £1,4 billion at 30 September 2009, compared to £1 billion a year earlier. ‘The increase is attributable to the recovery in equity markets during the period and the earnings achieved in the quarter. In addition, we have increased financial flexibility and liquidity due to the £500 million bond we placed in October,’ !Gawaxab said.Third-quarter sales have gained considerable momentum when compared with the first half of the year and it has been the strongest quarter for unit trust sales which went up 47 per cent to £1,7 billion. The Long-Term Savings Division delivered a good sales performance for the third quarter. Compared to the third quarter of 2008, Long-Term Savings life APE sales went down four per cent to £326 million. However, in the UK, life APE sales were at their highest level since the second quarter of 2008, up by six per cent to £72 million and unit trust sales were up 53 per cent to £536 million. Emerging Markets life APE sales went up six per cent while unit trust sales were particularly buoyant, up 30 per cent to £754 million.Due to an industry-wide trend where corporate customers withdraw benefits as a result of job losses in the corporate sector, as well as private customers who have surrendered policies in order to raise cash to support themselves, Old Mutual’s net client cash flow for the quarter was a negative £0,5 billion. ‘This is however an improvement on the £3,2 billion outflow experienced in the third quarter of 2008,’ !Gawaxab said.The gradual recovery in equity markets around the world is beginning to lift confidence levels, as funds under management are now back to approximately where they were in 2007. Total funds under management have increased by six per cent since the beginning of the year and are at £281 billion.Old Mutual also achieved positive client cash flows in the US asset management business.’We have made good progress this year despite the difficult economic environment. Business performance in the third quarter was good overall. ‘We have certainly had our challenges as a business, but in terms of capital and liquidity, we are better positioned now than at any time in the last 18 months,’ !Gawaxab said, adding that ‘further enhancing this position remains extremely important, to ensure strategic progress.’