INSURER Old Mutual said yesterday it would reduce its exposure to the US, selling its life business and listing its US asset-management arm as it revealed a fall in pre-tax profit.
The Anglo-South African business with banking, insurance and asset management operations in over 30 countries, is under pressure to slim down amid shareholder concerns that the group is straddling too many markets.
Floating the US funds operation and selling the life unit there will help Old Mutual cut at least £1.5bn from its £2.3bn debt pile, the company said, adding it was also targeting cost savings of £100m a year by the end of 2012.
But the strategic overhaul disappointed investors who had hoped for a more radical shake-up.
Oriel Securities analyst Marcus Barnard said: “This announcement could be seen as disappointing. After the strong run these shares have had, we would expect to see some profit-taking.”
Julian Roberts, chief executive, reassured shareholders that there were more asset sales in the pipeline but he was short on precise details.
“The worst thing would be to say so now,” Roberts said. “We will do so when the time is right.”
The group announced a pre-tax profit of £247m, down from £595m in 2008. While its adjusted pre-tax operating profit was £1.17bn, up from £1.14bn the previous year.