Peter Moyo, Old Mutual CEO. Picture: SUPPLIED
Peter Moyo, Old Mutual CEO. Picture: SUPPLIED

Shareholders in the Old Mutual Group enjoyed a special dividend in the group’s maiden interim results as a stand-alone entity, but if and when it might become a fully fledged bank after the Nedbank unbundling remains a guarded secret.

The group announced an interim dividend of 45c a share on Friday together with a special dividend of R1. With the unbundling of Nedbank shares later in 2018, which translates to about R8.01 per Old Mutual share, Old Mutual will have returned R46.8bn to shareholders thus far.

Old Mutual will retain a 19.9% stake in Nedbank after the unbundling, a stake Old Mutual CEO Peter Moyo described as a "long-term investment".

But with Nedbank soon to be a much smaller feature of the group’s profits, would a banking licence round out the "universal" integrated financial services model the group has adopted? This was an entirely plausible question Moyo would not be drawn on.

Some of this is informed by flexibility. Given that the group already lends to clients and offers a cheap transactional banking account with a debit card linked to an Old Mutual unit trust, Moyo says that it does not need a banking licence.

"We collect savings not deposits, so we don’t have the more stringent requirements typical of a bank," he says.

Banking would not be unfamiliar to the group. It already owns Zimbabwe’s second-largest bank, Cabs, and obviously has intimate knowledge of the SA banking landscape through its shareholding in Nedbank. The entry of another well-resourced group with the ability to cross-sell banking products would ratchet up competition in the industry to even higher levels.


Discovery Bank’s launch is imminent, while TymeDigital, a new entrant that received its banking licence in 2017, has recently been bought by African Rainbow Capital, the investment holding company of business person Patrice Motsepe.

Competition in the low-cost transactional banking and savings market is also being brought from Michael Jordaan’s Bank Zero, which recently obtained a licence.

Due to a number of significant events relating to the separation from its parent company, some of which remains unfinished business, Old Mutual announced that its adjusted headline earnings per share rose by 1% to R5.4bn for the six months to June.

Its operating segments delivered growth in earnings of 5%, but it was the investment returns generated on the life assets that fell 37% to R1.17bn which really prevented adjusted headline earnings from growing in double digits.

Within the operating segments, Old Mutual Insure – while still a relatively small business – was the star performer, growing earnings by 85% to R370m.

The disappointment was Personal Finance, which saw a 34% decline in earnings to R918m. This was largely due to higher death and disability claims and disinvestments.

Old Mutual Personal Finance MD Karabo Morule said they were puzzled by this development in higher death and disability claims.

"We used the services of a reinsurer to underwriting practices, and they determined that we were above average and that there were no incidents of non-disclosure or anti-selection."

Morule noted there had been an industry-wide anomaly of "elevated non-natural" deaths in certain professions.