African promise for Old Mutual as profits rise

LONDON-based insurer Old Mutual yesterday said its decision to expand in emerging African markets is paying off as it announced strong first half results.

The company, which relies heavily on sales in its South African homeland, has looked to expand across the continent during 2013, buying businesses in Nigeria, Kenya and Ghana.

“Sub-Saharan Africa as a whole has continued to see strong growth in the first six months of the year,” the company said in a statement as it posted a 14 per cent rise in operating profit to £801m for the period.

Old Mutual has been hit by the rapidly fluctuating value of the South African rand but saw an improvement in the performance of its US asset management business.

“Profit and balance sheet measures have been held back by currency movements,” said Marcus Barnard, an analyst with Oriel Securities.

“Further improvements can be expected with a partial sale of the US asset management business, further focus leading to stronger results from Old Mutual Wealth and an increasing exposure the fast growing African economies.”