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Old Mutual says to split up four main units

HSBC NEDBANK
Nadine Hutton | Bloomberg | Getty Images

Anglo-South African financial services group Old Mutual said on Friday it would split up the company into its four main units -Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank Group and OM Asset Management, following a strategic review.

The company said the current structure is inefficient and that changes to the regulatory environment in Europe and South Africa have made it more complex to run.

"It's a costly structure with insufficient synergies to justify those costs," chief executive Bruce Hemphill said in a statement.


The group said it has not yet decided how it will go about spinning off the units but that it expected the separation to be largely completed by the end of 2018.

Old Mutual announced its strategic review in November, after former Standard Bank executive Hemphill took over as chief executive.

The group said its pretax adjusted operating profit for 2015 rose 4 percent in reported currency terms to 1.7 billion pounds ($2.4 billion).

Its solvency capital ratio under new European rules was 135 percent, lower than many of the other major insurers that have reported earnings so far this year.

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