Liberty says management actions showing signs of progress
Liberty Holdings says that management actions are showing signs of progress as the group reported results for the six months ended June 2018, on Thursday.
The financial services company reported a 5% rise in normalised headline earnings of R1.33 billion, from R1.26 billion previously, with normalised operating earnings up 18% to R958 million (30 June 2017: R814 million).
“The normalised operating earnings were supported by increased earnings from the South African insurance operations and the STANLIB businesses,” Liberty said.
Normalised return on equity was 12.1%, from 11.7% in 2017.
Group long-term insurance net customer cash inflows amounted to R262 million in contrast to prior period outflows of R665 million, supported by lower policy withdrawals and maturities in Individual Arrangements and lower scheme terminations in Liberty Corporate.
“STANLIB South Africa continues to produce good fixed interest franchise investment returns and has made progress on improving investment performance within the multi-asset and equity franchises, with increased third party net customer cash inflows into non-money market portfolios,” it said.
STANLIB South Africa net customer cash inflows increased to R8.4 billion from R5.6 billion in the prior period. However, it experienced outflows of R7 billion, mainly related to the termination of one large institutional mandate.
Long-term insurance indexed new business of R3.77 billion is 4% below the prior period. “The tough economic environment has continued to place significant pressure on retail single and recurring premium investment and risk sales volumes, Liberty said.
Total group assets under management amounted to R719 billion (31 December 2017: R720 billion).
Liberty said that its capital position remained strong during the period with the capital adequacy ratio of the group’s main long-term insurance licence, Liberty Group Limited at 2,67 times the regulatory minimum at 30 June 2018 (31 December 2017: 2,92).
Group equity value per share was lower at R138,66 (31 December 2017: R140,31). The lower group equity value per share was attributable to lower investment returns, economic assumption changes due to the higher interest rate environment and the 2017 final dividend paid in April 2018.
As part of Liberty’s strategy refresh, a revised organisational design was announced internally in mid-July with implementation commencing in the second half of the year. “The key element of the group’s new way of working is to place the customers and financial advisers at the heart of everything we do, with a strong focus on the South African insurance and asset management businesses.”
Liberty said that collaboration with the Standard Bank Group continues to provide opportunities to grow new business and provide joint product offerings as evidenced in our bancassurance results.
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