A tie-up between MMI and African Bank will result in the insurance group selling its full suite of products to the bank’s 1.2-million customers, while using African Bank’s banking licence to offer its own clients unsecured loans of up to R200,000. The decision to enter banking was driven by a belief that to maximise financial wellness, MMI needed sight of client spending patterns, said head of investor relations Risto Ketola. "It is also a strategic defensive move and there is scope to make some additional revenue from this," he said. MMI has come under strain, reporting a 5% fall in core headline earnings to R1.6bn for the six months to December. The group reported its lowest return on embedded value in five years at 4.5%, down from 20% for the matching period in 2013. Embedded value is a measure of the present value of future profit in insurance companies. The insurance group is following rivals Sanlam and Old Mutual in extending personal loans to customers. These loans will be re...
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