Nedbank says it’ll be business as usual after parting with Old Mutual

Strategy, day-to-day management ‘won’t be affected’

NEDBANK chief executive Mike Brown is confident that the bank will continue to operate successfully after it has been listed as a separate entity by Old Mutual.

“For Nedbank, it is business as usual, and Old Mutual’s decision will have no impact on the strategy, the day-to-day management or operations. Our engagements have been at arm’s length, overseen by independent board structures,” Brown said.

Brown told Business Report yesterday that Old Mutual will still hold a strategic minority stake in Nedbank.

“Old Mutual operates predominantly in the investment, savings and insurance industry, which has little overlap with banking. However, we compete in the areas of wealth and asset management and personal loans,” he said. “Our technology systems, brands and businesses have not been integrated.”

He said Old Mutual would deliver its half-year results next week, when more update on the separation could be expected.

In May, the company announced that it intended to list a new South African holding company on the JSE with a secondary listing on the London Stock Exchange.

The group said the newly listed company would be named Old Mutual Limited and would initially comprise Old Mutual Emerging Markets, the group’s Nedbank shareholding, as well as Old Mutual plc, which would become a subsidiary of Old Mutual Limited.

The separation is expected to be materially complete by the end of 2018, and the listing of Old Mutual Limited is expected to take place in 2018, following Old Mutual plc’s 2017 full-year results announcement. The group added that the subsequent distribution of a significant proportion of the shareholding in Nedbank from Old Mutual Limited would follow in due course in an orderly manner as previously announced.

“Our collaboration with Old Mutual plc to unlock R1 billion of synergies by the end of 2017 from the Old Mutual plc businesses in South Africa remains on track and will continue to be underpinned by Old Mutual Limited’s strategic shareholding of Nedbank Group. We are fully committed to working with Old Mutual Limited to deliver ongoing synergistic benefits on an arm’s length basis,” Nedbank said.

Old Mutual has been going through some changes at the top. At the end of June, Old Mutual Asset Management (Omam) announced the departure of Peter Bain. He stepped down from his roles as president, chief executive and director, positions he has held since 2011. He was replaced by James Ritchie, the chairperson of the Omam board of directors, as executive chairperson and interim chief executive.

Old Mutual shares gained 2.42 percent on the JSE yesterday to close at R35.59.