Old Mutual is stepping up efforts to turn South Africa\u2019s newest bank profitable by 2028 as the continent\u2019s biggest insurer by assets looks to challenge lenders for a larger slice of banking earnings.<\/p>\n\n\n\n
\u201cWe\u2019re targeting a return from operations of sort of between break-even and 200 million profit in 2028,\u201d Old Mutual Chief Executive Officer Jurie Strydom said in an interview. <\/p>\n\n\n\n
OM Bank officially launched in August 2025 and has amassed 742,000 customers since then, reaching R1.38 billion in deposits.\u00a0<\/p>\n\n\n\n
\u201cWe will hit a million customers in the next couple of weeks,\u201d Strydom said. <\/p>\n\n\n\n
The bank is expected to grow deposits to as much as R10 billion by 2028, and scale lending to as much as R26 billion. <\/p>\n\n\n\n
Old Mutual has invested more than R4 billion in building the new lender and plans to spend more.\u00a0<\/p>\n\n\n\n
\u201cThere\u2019s R2 billion that has been earmarked to fund that pathway,\u201d he said.\u00a0<\/p>\n\n\n\n
Meanwhile, Old Mutual is doubling down on share buybacks as it looks to boost capital efficiency and enhance shareholder returns.<\/p>\n\n\n\n
According to Strydom, the strategy is \u201cvery attractive\u201d because it has allowed the insurer to take advantage of the steep discount between the share price and the company\u2019s intrinsic value. <\/p>\n\n\n\n
\u201cWhilst our business is operating at a return on net asset value below our target range, it makes sense for us to consider shareholder disbursements before doing mergers and acquisitions,\u201d he said.<\/p>\n\n\n\n
The company has spent R5.5 billion purchasing stock since 2023, including R3 billion in the six months through June. <\/p>\n\n\n\n
The board has approved a further R1 billion in repurchases for the current year.<\/p>\n\n\n\n
The average price paid this year was about R13, so \u201cwith a group equity value that is now at R20.66, and that\u2019s highly accretive for us,\u201d Strydom said.<\/p>\n\n\n\n
The announcements come after Old Mutual said profit declined for the first time since 2022 as risk-off sentiment from conflicts in the Middle East curbed investment returns at Africa\u2019s biggest insurer by assets. <\/p>\n\n\n\n
Adjusted headline earnings fell 30% to R2.95 billion in the six months through June, while the Johannesburg-based company declared an interim dividend of 40 cents per share.<\/p>\n\n\n\n
Still, the company\u2019s results from operations metric, which is their preferred measure of profit, climbed 7% to R5.28 billion, thanks to a 21% jump in premium sales.\u00a0<\/p>\n\n\n\n
Value of new business rose 32% in the period, helping lift the margin by 10 basis points to 1.4%. <\/p>\n\n\n\n
That remains below the company\u2019s target range of 2% to 3%. Group equity value increased 4% to R20.66 per share.<\/p>\n\n\n\n
\u201cI really am comfortable,\u201d Strydom said. \u201cWe are tracking towards those medium-term targets and we are where I\u2019d hope we would be in terms of execution.\u201d<\/p>\n\n\n\n
Its shares climbed as much as 1.9%, before paring gains to 1.1% by 10h20 in London.<\/p>\n\n\n\n
The company has named Ranen Thakurdin as its group chief financial officer-designate, effective 1 January. He will succeed Casper Troskie, who is retiring on 30 April, 2027.<\/p>\n","protected":false},"excerpt":{"rendered":"
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