Old Mutual has increased its annual dividend by 8% after reporting an improved operating performance in Old Mutual Life and Savings, and Old Mutual Insure.
Results from operations increased by 13% to R9.8bn in the year to end-December while adjusted headline earnings increased by 24% to R8.3bn, benefiting from elevated shareholder investment returns in South Africa and Malawi.
The group said elevated returns and performance in Malawi, which continues to experience high levels of inflation and shortages of foreign currency, had a significant effect on its 2025 earnings.
Operational costs increased by 11% to R1.9bn due to restructuring costs of R440m, which were incurred to reduce future expenditure. Excluding the effect of restructuring costs, shareholder operational costs reduced by R246m from the previous year, a decline of 15%.
IFRS profit increased by 10% to R8.4bn due to the improved operating performance, the previous year’s impairment of its China business and the loss on sale of its Nigeria business in 2024.
This was partially offset by reduced profits from the group’s Zimbabwean business after the transition of the functional currency to the dollar in 2024. Headline earnings declined by 2% to R8.6bn mainly due to the effect of Zimbabwe.
Results from operations per share rose 15% to 225.6c and adjusted HEPS was up 26% at 189.8c, while HEPS was down 1% to 201.6c.
A final dividend of 56c per share was declared, taking the total dividend to 93c, up 8% from the year before.
Life annual premium equivalent (APE) sales increased by 3%, supported by an 8% increase in Old Mutual Africa Regions and higher risk sales in Mass and Foundation, and Personal Finance, it said. This was mostly offset by lower guaranteed annuity sales in Personal Finance, driven by lower market yields.
Group gross written premiums increased by 5% due to Old Mutual Insure’s contribution, which improved by 7% year on year.
Gross flows were up 7% supported by stronger flows in Old Mutual Life and Savings. Improved flows into local and offshore platforms, Private Clients and Symmetry solutions in Wealth Management and recurring premium growth in pre-retirement savings products in Old Mutual Corporate drove higher inflows.
Gross loans and advances decreased by 4%, driven primarily by a 3% decrease in the Old Mutual Finance loan book.
The value of new business declined by 52% largely due to strengthened persistency assumptions, as well as lower annuity and retirement fund umbrella sales. This led to a reduction in the value of new business margin to 1.2%, below the group’s target range, it said.
The group has reset its strategic priorities to unlock shareholder value and generate growth. The focus for value creation is on group equity value and cash generation. Group equity value per share increased by 2% to R19.80.
During 2025, Old Mutual sharpened its corporate strategy around a clear value creation framework, spanning two phases: unlocking value and generating growth.
This is anchored in four strategic priorities: driving competitiveness in its South African businesses; deepening market leadership in Southern Africa; OM Bank; and evaluating and selectively pivoting in growth markets and initiatives.
It has also implemented a more devolved operating model, with greater end-to-end accountability for business delivery held within cluster profit centres, supported by a leaner corporate centre. The focus has now firmly shifted to execution, it said.
“Customer and deposit trends in OM Bank are tracking well, ahead of public marketing campaigns in [the second quarter], with strong activation from the Old Mutual branch network,” it said.
The group announced a R3bn share buyback in September, with R700m completed by year-end.
Old Mutual said while the global environment is likely to remain uncertain, the South African outlook has become more constructive, supported by the 2026 national budget, which reaffirmed a commitment to fiscal discipline.
“With public debt projected to stabilise and decline over the medium term, alongside a sustained primary surplus and targeted relief for households, these conditions will provide a more supportive foundation for confidence and investment,” it said.
“We remain committed to restoring our value of new business margin by focusing on enhancing business mix, retention and collections, supported by cost savings,” it said.