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Old Mutual PLC OML Interim Management Statement



  Old Mutual PLC (OML) - Interim Management Statement

RNS Number : 4936Q
Old Mutual PLC
07 November 2012
 



 

 

 

 

7 November 2012                                         

Old Mutual plc Interim Management Statement

For the three months ended 30 September 2012

 

Further strategic progress and a resilient operational performance

·    Funds under management in core operations up 4% to £263.3 billion

·    Q3 NCCF outflows narrowed to £(0.5) billion from £(5.4) billion

·    Continued business improvement and strategic delivery:

o  £1.5 billion debt repayment target met;

o  Further repositioning of USAM affiliate portfolio;

o  Reorganisation of Old Mutual Wealth;

o  Finnish sale completed; Austrian and German operations closing to new
business;

o  Terms agreed for Nigerian P&C acquisition from Ecobank for around $20
million.

 

Julian Roberts, Group Chief Executive, commented:

"This has been  another quarter of  good operational progress  overall with  a 
strong performance in emerging markets.

"Our sales during the period highlight the growing shift from traditional life
products to  modern  investment products,  including  unit trusts  and  mutual 
funds, with these sales  up 19% in  Emerging Markets and  7%, on a  comparable 
basis, in Wealth.

"In South Africa our mass foundation business continued to grow and APE  sales 
across Emerging Markets saw a double-digit increase.

"Although UK savings trends  remain depressed by  low consumer confidence  and 
pressure on household finances,  our performance in  the UK and  International 
was encouraging,  with gross  sales of  £2.8 billion  in the  quarter. We  are 
progressing well with  our plans  to build Old  Mutual Wealth  into a  leading 
wealth manager and are taking further steps to address its cost base.

"Nedbank has maintained its progress  with positive margins, strong growth  in 
non-interest revenue and continued reductions in credit losses.

"In the short  term, the  sector will continue  to be  challenged by  external 
factors but  we  will continue  to  develop  products and  services  that  our 
customers want, drive efficiency improvements throughout our business and,  as 
a result, deliver sustainable value for shareholders."

 

 

 

 

                               

    GROUP RESULTS                                   ^         ^         ^ 
^   ^          ^             ^         ^            ^         ^         ^ 
    Group highlights for the                                   Q3 2011
    three months ended 30              % of opening              (as
^   September 2012 (£bn)      Q3 2012     FUM^1     ^         reported)
    Net client cash flow     ^         ^                      ^             ^ 
    (NCCF)                                          ^ 
^   Long-Term Savings          0.3          1%      ^           1.3 
    Nedbank                    0.5         21%      ^           0.2 
    US Asset   - Continuing    (1.1)       (4)%                 (1.9)
    Management operations^2                         ^ 
            ^  -
               Transferred,
               disposed or     (0.2)       (2)%                 (5.0)
               held for
               sale^2                               ^ 
    NCCF from core             (0.5)       (1)%                 (5.4)
    operations                                      ^ 
                                                       ^ 
                                       30 June 2012
                                30      (constant   % change   30 June
    Group highlights at 30   September   currency   (constant 2012 (as   % change
    September 2012 (£bn)       2012       basis)    currency) reported) (reported)
    Funds under management   ^         ^            ^         ^             ^ 
    (FUM)
^   Long-Term Savings         118.2       115.1        3%      117.2        1%
    Nedbank                    11.0       10.1         9%       10.6        4%
    Mutual & Federal           0.2         0.2         -        0.2         - 
    US Asset   - Continuing   126.7       122.0        4%      125.6        1%
    Management operations^2 
            ^  -
               Transferred,
               disposed or     7.2         6.9         4%       7.1         1%
               held for
               sale^2 
    FUM from core operations  263.3       254.3        4%      260.7        1%
    Group highlights for the             % change              Q3 2011
    three months ended 30                 (local                 (as     % change
    September 2012 (£m)       Q3 2012  currency)^3     ^      reported) (reported)
    Covered sales (APE)      ^         ^            ^         ^             ^ 
    Emerging                   140         12%         ^        142        (1)%
^   Markets
    Old Mutual                 138        (17)%        ^        166       (17)%
    Wealth
    Total covered sales        278                     ^        308       (10)%
    (APE)
                                                       ^ 
    Non-covered sales^4      ^         ^            ^            ^          ^ 
^   Emerging Markets          2,368        19%         ^       2,219        7%
    Old Mutual Wealth         1,397        33%         ^       1,048       33%
    Long-Term Savings         3,765                    ^       3,267       15%
    US Asset   - Transferred
    Management or               -         (100)%       ^        362       (100)%
               disposed^2 
    Total non-covered sales   3,765                    ^       3,629        4%
    Note percentage movements on reported figures in the above table are based on
    rounded sterling numbers.
    ^          ^             ^         ^            ^         ^         ^ 
^1  Annualised NCCF.
^2  Continuing operations exclude the results of OMCap, Dwight, and Lincluden,
    which were sold prior to 30 June 2012, OMAM(UK), which was transferred to Old
    Mutual Wealth prior to 30 June 2012, and 2100 Xenon Group, 300 North Capital,
    Analytic Investors, Ashfield Capital Partners and Larch Lane Advisors, which
    were held for sale at 30 September 2012. Comparatives have been restated.

     
^3  Business unit percentages are calculated on a local currency basis.
^4  Non-covered sales includes mutual funds, unit trust and other sales.

 

Introduction

Unless otherwise stated, the  figures given throughout  this document are  for 
the three months ended 30 September 2012 (the period) and comparative  figures 
are for the  same period in  2011 (the comparative  period). Unless  otherwise 
stated, all percentage movements  are presented on a  local currency basis  to 
exclude the impact of foreign exchange movements.

Group funds under management

Funds under  management  (FUM) in  our  core operations  increased  to  £263.3 
billion (30 June  2012: £254.3  billion on  a constant  currency basis),  with 
equity markets strengthening during  the quarter. The S&P  500 was up 6%,  the 
FTSE 100 was up 3% and the JSE ALSI was up 6%.

In our Long-Term Savings  division (LTS) FUM increased  to £118.2 billion  (30 
June 2012: £115.1 billion on  a constant currency basis).Emerging Markets  FUM 
increased by  3%, on  a constant  currency  basis, to  £50.9 billion,  due  to 
positive market movements.  Old Mutual  Wealth FUM  increased by  3% to  £67.3 
billion, driven  by net  client  cash inflows  and  improved markets.  UK  FUM 
increased 5% to £35.8  billion, with UK  Platform FUM of  £21.7 billion up  6% 
from 30  June  2012 and  up  15% from  31  December 2011.  Old  Mutual  Global 
Investors (OMGI) managed £13.2 billion of FUM.

FUM from continuing operations  at USAM increased 4%,  on a constant  currency 
basis, to £126.7billion.  Positive market movements  were partially offset  by 
net client cash outflows, although outflows were improved on Q3 2011.

Long-Term Savings

In September 2012  the Group announced  the merger of  the Skandia  businesses 
(Skandia UK,  Skandia  International,  Old Mutual  Global  Investors  and  the 
Skandia European  businesses  outside of  the  Nordic region)  into  a  single 
business called Old  Mutual Wealth.  The operational changes  are designed  to 
combine asset management  capability with  UK platform  strength and  offshore 
expertise to grow into  a leading provider of  wealth management solutions  in 
the UK and internationally.

Net client cash flow

LTS achieved  positive  NCCF  of  £0.3  billion  (Q3  2011:  £1.3  billion  as 
reported), with continued net inflows onto the UK Platform and strong flows in
Emerging Markets offset by  a £1.0 billion cash  outflow of low margin  equity 
assets from the South African Public Investment Corporation (PIC).

Emerging Markets NCCF was an outflow  of £0.2 billion, with strong inflows  in 
Retail Affluent and lower pre-retirement  terminations in Corporate offset  by 
the PIC outflow. Excluding the PIC outflow NCCF increased by 74% on Q3 2011.

Old Mutual Wealth NCCF was £0.5 billion (Q3 2011: £0.8 billion). NCCF for  the 
UK Platform  fell  to  £0.4  billion from  £0.8  billion.  Trading  conditions 
continued to be  challenging, with increased  pressure on household  finances, 
and investor concerns over the eurozone, and markets more generally, impacting
confidence.

Sales

LTS sales  on an  annual  premium equivalent  (APE)  basis decreased  to  £278 
million, despite  strong  regular  premium  sales  in  Emerging  Markets  Mass 
Foundation Cluster (MFC).

LTS non-covered sales, including unit  trust and mutual fund sales,  increased 
to £3,765 million, with strong sales  in both Emerging Markets and Old  Mutual 
Wealth.

APE sales  in Emerging  Markets  increased by  12%  to £140  million.  Regular 
premium sales  increased  11%  with  continued  momentum  in  MFC,  delivering 
excellent growth  of  22%, as  a  result of  a  larger sales  force,  improved 
productivity and the inclusion of OMF Credit  Life sales of R37 million in  Q3 
2012, which was  not consolidated  in the  comparative period. Single  premium 
sales were up 14% as  a result of a large  annuity deal secured by  Corporate. 
Retail Affluent sales were  flat, having been impacted  mainly by lower  fixed 
bond and guaranteed annuity sales, partly  offset by legacy to new  generation 
product conversions.

Non-covered sales in Emerging Markets increased by 19% to £2,368 million, with
strong unit trust and mutual fund sales in South Africa. Other non-life  sales 
were boosted by significant, lower  margin inflows into OMIGSA's Dibanisa  and 
Liability-Driven Investment boutiques and the  inclusion of the other  African 
countries (Kenya, Malawi, Zimbabwe  and Swaziland) in Q3  2012 but not in  the 
comparative period.

In Old Mutual Wealth gross sales (gross client cash inflows) were £2.8 billion
(Q3 2011: £2.6 billion). On the UK Platform gross sales were £0.9 billion  (Q3 
2011: £1.2 billion). The structural shift of the business towards  non-covered 
sales continued.  Old  Mutual  Wealth's Austrian  and  German  businesses  are 
closing to new business, as they  do not meet the Group's investment  criteria 
for adding shareholder value. These businesses will now be managed for value.

Old Mutual Wealth APE  sales decreased by 17%  to £138 million.  International 
APE sales  were impacted  by  the HMRC  restriction on  Qualifying  Recognised 
Overseas Pension Schemes (QROPS). A new structure was successfully implemented
in Malta in Q3 2012 and some recovery in sales performance is expected in this
product line in Q4 2012. Single premium APE sales in Old Mutual Wealth  Europe 
increased, as a result of strong sales in Italy.

Old Mutual Wealth  non-covered sales increased  by 33% to  £1,397 million,  of 
which OMGI  sales  were £856  million.  Old Mutual  Wealth  non-covered  sales 
increased by 7% taking into account the  results of OMAM (UK) in both Q3  2012 
and Q3 2011. Similarly, non-covered sales in OMGI increased by 58%,  primarily 
resulting from strong sales of the  OMAM Global Bond and the Global  Strategic 
Bond. Investment performance  in OMAM  (UK) remains  strong with  50% of  OMAM 
(UK)'s on and off-shore OEIC funds in  the 1st quartile over 3 years, and  81% 
of funds above median.

US Asset Management

On 11 October 2012, US Asset  Management (USAM) announced that it had  entered 
into definitive agreements to sell five of its US affiliates to their  current 
senior management teams,  subject to  customary closing  conditions. The  five 
affiliate asset managers  are 2100  Xenon Group, 300  North Capital,  Analytic 
Investors, Ashfield Capital Partners  and Larch Lane  Advisors (the "held  for 
sale" affiliates). These  businesses had combined  assets under management  of 
$11.7 billion at 30 June 2012.  These transactions complete the transition  of 
USAM's existing portfolio and will enable USAM to focus on its nine  remaining 
affiliates.

Results from continuing operations exclude the held for sale affiliates. As in
prior periods, they  also exclude  Lincluden, Dwight and  Old Mutual  Capital, 
which were sold  prior to 30  September 2012,  and the results  of OMAM  (UK), 
which is now part of Old Mutual Wealth. USAM reported results for 2011 and  Q1 
2012 include OMAM (UK).

NCCF from  continuing  operations was  an  outflow of  £1.1  billion,  largely 
relating to equities and global fixed income products. Gross inflows were £3.7
billion (Q3 2011: £2.6  billion), of which £1.4  billion came from new  client 
accounts. Inflows were largely driven by sales in higher fee products such  as 
emerging market  equities. Gross  outflows were  £4.9 billion  (Q3 2011:  £4.5 
billion), largely  in lower  fee products  such as  fixed income  strategies.  
Gross outflows included £0.6 billion  (Q3 2011: £0.4 billion) of  realizations 
of client  investment property  assets, managed  by the  Heitman affiliate.  A 
further £0.3 billion  ($0.5 billion)  of gross  outflows related  to a  client 
account which was re-deposited early in Q4 2012. In early October 2012  USAM's 
Campbell Group affiliate closed a  £0.4 billion ($0.7 billion) acquisition  of 
forestry assets  in South  Australia.  This was  Campbell Group's  first  deal 
outside the United States as it seeks to expand its international operations.

For the one-year period ended 30  September 2012, 64% of assets in  continuing 
operations outperformed  benchmarks  (Q3  2011: 63%).   Over  the  three-  and 
five-year periods,  88%  (Q3 2011:  60%)  and 67%  (Q3  2011: 61%)  of  assets 
outperformed benchmarks.

Nedbank

Nedbank  figures  are  for  the  nine  months  ended  30  September  2012  and 
comparative figures are for the same period in 2011.

Nedbank is  still  on  track  to  meet its  earnings  growth  target  in  2012 
notwithstanding the more challenging economic environment. Net interest income
grew by 9% to  R14.5 billion and non-interest  revenue increased 14% to  R12.4 
billion. The credit loss ratio from impairments improved from 1.13% to  1.03%. 
Nedbank's capital ratios remained well above current regulatory minima, with a
Basel II.5 Core Tier 1 ratio of  10.7% (30 June 2012: 10.6%). Nedbank  remains 
in a strong position to meet the expected Basel III capital requirements.

The full text of Nedbank's Q3 2012 trading update, released on 29 October 2012
and also announced by Old Mutual plc on the same day, can be accessed on
Nedbank's website at:
http://www.nedbankgroup.co.za/financialQuaterlyResults.asp

Mutual & Federal

M&F delivered strong growth in the number of policies written, particularly in
new direct markets, supported by improved service. Gross written premiums grew
8% to R2.5  billion, with  continued focus  on premium  growth in  alternative 
distribution channels, including underwriting  management agencies and  direct 
through iWyze. Investment in iWyze continues  to have a significant impact  on 
the overall underwriting result.

M&F recorded several  large claims,  particularly in  its Commercial  business 
line,  and  experienced  a  softening  underwriting  environment.   Management 
continued to take  steps to  improve underwriting  performance including  cost 
containment and selective pricing action on poor performing lines of business.
M&F has recorded approximately R50 million of hailstorm and flood claims  from 
storms in early October 2012.

We have agreed terms  to acquire Ecobank's property  and casualty business  in 
Nigeria. The transaction will  be subject to  regulatory approval. The  agreed 
consideration will be around R170 million (US$20 million).

Capital and liquidity

On 19 July 2012,  the Group announced a  tender to repurchase debt  securities 
for an aggregate consideration of  £450 million.  The tender was  subsequently 
increased to  £459 million,  due to  high  demand, and  was satisfied  in  its 
entirety against £388 million notional of the £500 million 7.125% senior notes
maturing in 2016.  In addition, on 25 September 2012 the Group announced  that 
it had redeemed all  of the  $750 million 8%  guaranteed cumulative  perpetual 
preferred securities. The  redemption of these  preferred securities took  the 
total amount  of cash  used to  reduce debt  to £1.52  billion, exceeding  the 
Group's target of £1.5 billion by the end of 2012. A further £180 million will
be repaid  in  due  course, in  accordance  with  the plans  set  out  in  the 
shareholder circular relating to the Nordic sale.

The pro-forma Financial Groups Directive (FGD) surplus reduced to £1.9 billion
at 30 September 2012 (30 June 2012: £2.3 billion), with statutory profits  and 
other positive movements, largely from Emerging Markets, Old Mutual Wealth and
Bermuda, offset by the redemption of the Group's $750 million retail preferred
instrument and the accrual for ordinary and preferred dividends.

The £0.9  billion  repayment of  debt  and the  repayment  at maturity  of  an 
intercompany loan with Nedbank reduced holding company available liquid assets
and undrawn committed facilities to £1.3 billion (30 June 2012: £2.4 billion).
Available liquid assets  at the  holding company  were £0.3  billion (30  June 
2012: £1.4 billion).

Material events and transactions

The Group completed the sale of  the Finnish branch of Skandia Life  Assurance 
Company Ltd to OP-Pohjola osk on 31 August 2012. At 30 June 2012, the  Finnish 
branch had gross assets of €1.3 billion.

We have agreed the terms of the transfer of the Group's Colombian and  Mexican 
businesses to Old  Mutual South  Africa, subject to  regulatory approval.  The 
consideration for the  transfers is based  on local currency  values. We  have 
hedged the  local currency  consideration  for the  transfers to  protect  the 
sterling value.

The proposed disposal of the held for  sale affiliates of USAM is expected  to 
complete by  the end  of  2012. The  consideration includes  some  performance 
contingent consideration. Client consents  in respect of  300 North and  Larch 
Lane have been received.

We have been informed that Harbinger Inc has completed its refinancing of  the 
remaining CARVM reserves in respect of our previously owned US Life  business. 
This removes the  need for  the reinsurance  arrangements between  it and  Old 
Mutual Reassurance  and consequently  the Group  no longer  provides the  $265 
million letter of credit to back these reserves.

Long-term  interest  rates  in  South  Africa  decreased,  with  the   10-year 
government bond  yield reducing  from  7.6% at  30 June  2012  to 7.0%  at  30 
September 2012. The financial  soundness valuation (FSV) economic  assumptions 
are based on the 10-year government bond yield. A reduction in this yield  has 
an unfavourable impact on IFRS AOP for Emerging Markets and in particular  its 
Retail businesses.  The  10-year government  bond  yield at  31  October  2012 
improved to 7.3%.

The 2012 rates for  the long-term investment return  (LTIR), effective from  1 
January 2012, are  9.0% for Emerging  Markets, 8.6% for  Mutual & Federal  and 
1.5% for Old Mutual  Wealth. The reduction in  nominal yields on fixed  income 
and cash, and lower equity appreciation  in recent years are likely to  reduce 
the long-term  rate in  the  future. Actual  investment returns  recorded  for 
Emerging Markets  represent  the  net  results after  write  offs  and  market 
movements from all shareholder capital, excluding capital invested in  Nedbank 
and M&F.

Bermuda

At 30 September 2012, the estimated  gross cash cost of meeting the  remaining 
fifth anniversary guarantees to Guaranteed Minimum Accumulation Benefit (GMAB)
policyholders over the next  11 months reduced  to approximately $305  million 
(30 June  2012: $559  million). In  March 2012  Bermuda enhanced  its  hedging 
strategy by  implementing  an  option-based  hedging  arrangement  to  protect 
against the risk of equity market declines increasing the cash cost of meeting
fifth anniversary  contract  top-up  obligations.  Foreign  currency  exchange 
exposures and the residual  equity market risk for  the risk extending  beyond 
the five-year top-ups are now at a hedge level of 50%.

Surrenders on contracts reaching  their fifth anniversary guarantee  continued 
at a similar, higher than  expected, rate during the  third quarter. As at  30 
September 2012  about  38% of  guaranteed  policies had  reached  their  fifth 
anniversary date of  which 61% were  surrendered on or  after the  anniversary 
date. The  reserving  in  the  Bermuda business  is  a  function  of  expected 
surrenders, as well as other  factors. The actual surrender experience  during 
the course of the  year is ahead  of assumptions, so we  expect to revise  the 
assumptions we use  in our  full year  results. This is  likely to  lead to  a 
reduction in the  guarantee reserve reported  at 31 December  2012, all  other 
things being equal.

Notes to Editors:

A conference call  for analysts  and investors will  take place  at 09.00  (UK 
time) and 11.00 (South African time) today. Analysts and investors who wish to
participate in the call should  dial the following numbers quoting  conference 
pin 959227#:

UK and International (outside  South Africa and  US)                           
+44 (0)20 3140 0668

South                                                                   Africa 
                                                                                      
+27 (0)11 019 7051

US                                                                                                       
+1 631 510 7490

Please dial in 10 minutes before the scheduled start time of the call to avoid
excess holding.

A replay facility will be available until midnight on 21 November 2012 on  the 
following number, quoting access pin 387375#:

UK / standard international                                                   
                  +44 (0)20 3140 0698

Copies of this update, together  with high-resolution images and  biographical 
details of  the  Executive Directors  of  Old  Mutual plc,  are  available  in 
electronic format to download from the Company's website at www.oldmutual.com.

This Interim Management Statement has been prepared in accordance with section
4.3 of the  Disclosure and Transparency  Rules (DTR) and  covers the period  1 
July 2012 to 6 November 2012. The business update is included in this  Interim 
Management Statement.  A  Disclosure  Supplement  relating  to  the  Company's 
business update can be found on our website. This contains key financial  data 
for the three months ended 30 September 2012.

Life assurance APE sales are calculated as the sum of (annualised) new regular
premiums and 10%  of the new  single premiums written  in an annual  reporting 
period.

Foreign exchange rates used for constant currency calculations

 

                                 Appreciation /               Appreciation /
                             (depreciation) of local         (depreciation) of
             Q3 2012 Q3 2011        currency         HY 2012  local currency
     Average 12.70   11.27            (13)%          12.52         (1)%
Rand Rate*
     Closing 13.39   12.58            (6)%           12.84         (4)%
     Rate
     Average  1.58    1.61             2%             1.58          - 
USD  Rate*
     Closing  1.62    1.56            (4)%            1.57         (3)%
     Rate
* Average rate is for the nine months to 30 September.

 

Cautionary statement

This announcement contains forward-looking statements with respect to  certain 
of Old Mutual  plc's and  its subsidiaries' plans  and its  current goals  and 
expectations relating  to  its  future financial  condition,  performance  and 
results. By  their nature,  all forward-looking  statements involve  risk  and 
uncertainty because they relate  to future events  and circumstances that  are 
beyond Old Mutual plc's control, - including, among other things, UK and South
African domestic and global  economic and business conditions,  market-related 
risks such as fluctuations in interest rates and exchange rates, policies  and 
actions of  regulatory  authorities,  the impact  of  competition,  inflation, 
deflation,  the  timing  and  impact  of  other  uncertainties  or  of  future 
acquisitions or combinations within relevant industries, as well as the impact
of tax and other  legislation and other regulations  in territories where  Old 
Mutual plc or its subsidiaries operate.

As a result, Old Mutual plc's actual future financial condition, performance
and results may differ materially from the plans, goals and expectations set
out in Old Mutual plc's forward-looking statements. Old Mutual plc undertakes
no obligation to update any forward-looking statements contained in this
announcement or any other forward-looking statements that it may make.

 

Enquiries

External communications
Patrick Bowes           UK +44 (0)20 7002 7440
Investor relations
Kelly de Kock           SA +27 (0)21 509 8709 
Media
William Baldwin-Charles    +44 (0)20 7002 7133

                           +44 (0)7834 524 833

 

 

 

 

 

Interim Management Statement - Appendix 

    GROUP FINANCIAL DATA                                      ^         ^ 
^   ^           ^               ^         ^         ^         ^         ^ 
                                                     Q3 YTD
                                                      2011
    Group highlights for the                % of    (constant  Q3 YTD
    nine months ended 30         Q3 YTD    opening  currency  2011 (as
^   September 2012 (£bn)          2012     FUM^1     basis)   reported)
    Net client cash flow (NCCF) ^         ^         ^         ^         ^ 
^   Long-Term Savings              1.7       2%        3.2       3.3
    Nedbank                        1.3       18%       0.5       0.6
    US Asset    - Continuing       1.3       1%       (3.2)     (3.2)
    Management  operations^2 
             ^  - Transferred,
                disposed or       (1.0)     (4)%     (10.4)    (10.1)
                held for
                sale^2 
    NCCF from core operations      3.3       2%       (9.9)     (9.4)
                                           30 June
                                            2012
                                   30     (constant            30 June
    Group highlights at 30      September currency            2012 (as    %
    September 2012 (£bn)          2012     basis)   % change  reported) change
    Funds under management      ^         ^         ^         ^           ^ 
    (FUM)
^   Long-Term Savings            118.2     115.1       3%      117.2      1%
    Nedbank                       11.0      10.1       9%       10.6      4%
    Mutual & Federal              0.2       0.2        -        0.2       - 
    US Asset    - Continuing     126.7     122.0       4%      125.6      1%
    Management  operations^2 
             ^  - Transferred,
                disposed or       7.2       6.9        4%       7.1       1%
                held for
                sale^2 
    FUM from core operations     263.3     254.3       4%      260.7      1%
                                           Q3 YTD
                                            2011
    Group highlights for the              (constant            Q3 YTD
    nine months ended 30         Q3 YTD   currency            2011 (as    %
    September 2012 (£m)           2012     basis)   % change  reported) change
    Covered sales (APE)         ^         ^         ^         ^           ^ 
    Emerging                      394       352        12%      397      (1)%
^   Markets
    Old Mutual                    445       548       (19)%     548     (19)%
    Wealth
    Total covered sales (APE)     839       900       (7)%      945     (11)%
    Non-covered sales^3         ^         ^         ^            ^        ^ 
^   Emerging Markets             6,219     4,883       27%     5,458     14%
    Old Mutual Wealth            4,063     3,513       16%     3,513     16%
    Long-Term Savings            10,282    8,396       22%     8,971     15%
    US Asset    - Transferred     344      1,269      (73)%    1,240    (72)%
    Management  or disposed^2 
    Total non-covered sales      10,626    9,666       10%     10,211     4%
    Note percentage movements on reported figures in the above table are based
    on rounded sterling numbers.
    ^           ^               ^         ^         ^         ^         ^ 
^1  Annualised NCCF.
^2  Continuing operations exclude the results of OMCap, Dwight, and Lincluden,
    which were sold prior to 30 June 2012, OMAM(UK), which was transferred to
    Old Mutual Wealth prior to 30 June 2012, and 2100 Xenon Group, 300 North
    Capital, Analytic Investors, Ashfield Capital Partners and Larch Lane
    Advisors, which were held for sale at 30 September 2012. Comparatives have
    been restated.

     
^3  Non-covered sales includes mutual funds, unit trust and other sales.
    ^ 

 

Long-Term Savings: Emerging Markets

APE sales
                                                                            Rm
             Single premium APE   Gross regular premiums       Total APE
By Cluster: Q3 '12  Q3 '11    %   Q3 '12  Q3 '11    %    Q3 '12  Q3 '11    %
South
Africa
Mass
Foundation       1       1     -     685     561     22%    685     562    22%
Retail
Affluent       215     216     -     398     396      1%    613     612     - 
Corporate      156      75   108%    135     168   (20)%    291     243    20%
OMIGSA          49      77  (36)%       -       -     -      49      77  (36)%
Total South
Africa         421     369    14%  1,218   1,125      8%  1,638   1,494    10%
Rest of
Africa*         35      29    21%    114      73     56%    150     102    47%
Asia &
Latin
America**        7       7     -      24      21     14%     31      28    11%
Total
Emerging
Markets        463     405    14%  1,356   1,219     11%  1,819   1,624    12%
* Rest of Africa includes R69 million of APE sales in Q3 2012 from the
consolidation of Kenya, Malawi, Zimbabwe and Swaziland.
** Includes
Mexico
only.
                                                                            Rm
             Single premium APE   Gross regular premiums       Total APE
By Product: Q3 '12  Q3 '11    %   Q3 '12  Q3 '11    %    Q3 '12  Q3 '11    %
Emerging
Markets
Savings        325     356   (9)%    655     515     27%    980     871    13%
Protection        -       -    -     701     704      -     701     704     - 
Annuity        138      49   182%       -       -     -     138      49   182%
Total
Emerging
Markets        463     405    14%  1,356   1,219     11%  1,819   1,624    12%
Non-covered sales*
                                                                            Rm
             Unit trust / mutual    Other non-covered      Total non-covered
                 fund sales               sales                  sales
            Q3 '12  Q3 '11    %   Q3 '12  Q3 '11    %    Q3 '12  Q3 '11    %
South
Africa       8,137   5,031    62% 12,646  11,177     13% 20,783  16,208    28%
Rest of
Africa**     1,542   1,219    26%    649      53  1,125%  2,191   1,272    72%
Asia &
Latin
America      7,267   7,986   (9)%    521     365     43%  7,788   8,351   (7)%
Emerging
markets     16,946  14,236    19% 13,816  11,595     19% 30,762  25,831    19%
* Non-covered sales exclude Zimbabwe CABS deposits.
** Rest  of Africa  includes R759  million of  total non-covered  sales  (R246 
million unit trust  / mutual  fund sales  and R513  million other  non-covered 
sales) in  Q3 2012  from  the consolidation  of  Kenya, Malawi,  Zimbabwe  and 
Swaziland.

 

Long-Term Savings: Old Mutual Wealth

 

Gross sales and funds under management
                                                                           £bn
                                                            Market
                                                            and
                                 Gross               Net    other
                       30-Jun-12 Sales  Redemptions  flows  mvmnts   30-Sep-12
Old Mutual Wealth
UK Legacy                  13.8    0.2         (0.5)  (0.3)    0.6       14.1 
UK Platform                20.4    0.9         (0.5)   0.4     0.9       21.7 
International*             14.6    0.4         (0.3)   0.1    (1.0)      13.7 
OMGI - external             7.0    0.9         (0.8)   0.1     0.5        7.6 
Old Mutual Wealth
Europe                      9.7    0.4         (0.2)   0.2     0.3       10.2 
Total                      65.5    2.8         (2.3)   0.5     1.3       67.3 
Old Mutual Global
Investors
OMGI - external             7.0    0.9         (0.8)   0.1     0.5        7.6 
OMGI - Group
internal                    5.5    0.3         (0.3)     -     0.1        5.6 
Total OMGI funds
managed                    12.5    1.2         (1.1)   0.1     0.6       13.2 
* The negative movement in international FUM 'market and other movements' was
as a result of the sale of Finland, which resulted in an outflow of around £1
billion of assets.

 

APE Sales
                                                                            £m
                      Gross single premiums    Gross regular      Total APE
                                                  premiums
                                               Q3    Q3         Q3   Q3
                      Q3 '12   Q3 '11    %     '12  '11    %   '12  '11    %
UK market
Pensions              359      387      (7)%   8    9    (11)% 45   48   (6)%
Bonds                  80       99     (19)%   -    -      -   8    10   (20)%
Total UK Platform     439      486     (10)%   8    9    (11)% 53   58   (9)%
International
Unit-linked            42       40       5%    4    7    (43)% 8    12   (33)%
Bonds                 315      425     (26)%   6    6     -    37   47   (21)%
Total International   357      465     (23)%  10    13   (23)% 45   59   (24)%
Old Mutual Wealth
Europe
Unit-linked           243      156      56%    2    4    (50)% 26   19    37%
Total Old Mutual                                               124  136
Wealth               1,039    1,107     (6)%  20    26   (23)%           (9)%
Heritage business
UK Legacy              26       51     (49)%   6    10   (40)% 8    15   (47)%
Old Mutual Wealth
Europe*                7        9      (22)%   5    14   (64)% 6    15   (60)%
Total Heritage         33       60     (45)%  11    24   (54)% 14   30   (53)%
Total Old Mutual
Wealth (including                                              138  166
heritage business)   1,072    1,167     (8)%  31    50   (38)%           (17)%
 

 

 

Non-covered sales
                                           £m
                      Q3 '12   Q3 '11    %
Mutual Funds           218      418    (48)%
ISA                    185      256    (28)%
Total UK Platform      403      674    (40)%
OM Global
Investors**            856      284     201%
Old Mutual Wealth
Europe                  8       10     (20)%
Total Old Mutual
Wealth                1,267     968     31%
Heritage business
UK Legacy              127      74      72%
Old Mutual Wealth
Europe*                 3        6     (50)%
Total Heritage         130      80      63%
Total Old Mutual
Wealth (including
heritage business)    1,397    1,048    33%
* Includes business written in Germany, Austria and Switzerland.
** OMAM (UK) sales were recorded in USAM up until the transfer to OMGI in Q2
2012. OMAM (UK) non-covered sales for Q3 2011 were £258 million.

 

Bermuda reserve development

The movement in guarantee reserves over the last two years is shown below:

                                                                            $m
                 UGO GMAB Actual Cumulative    Estimated UGO fifth-anniversary
Period            reserve       top-up paid                             top-up
30 September
2010                  824                 -                                458
31 December 2010      660                 -                                334
31 March 2011         573                 -                                303
30 June 2011          620                 -                                346
30 September
2011                1,144                 -                                738
31 December 2011    1,035                 -                                689
31 March 2012         794                18                                463
30 June 2012          851               101                                559
30 September
2012                  533               256                                305
31 October 2012       463               320                                237

 

Exposure to  sovereign debt  in Portugal,  Italy, Ireland,  Greece, Spain  and 
France

The Group has no exposure to  the sovereign debt of Portugal, Italy,  Ireland, 
Greece or Spain. The Group's exposure to French sovereign debt is less than £1
million.

 

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
IMSBKADQCBDDDDK -0- Nov/07/2012 07:00 GMT
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