Old Mutual spreads wings
Old Mutual is making a push into banking low-income earners in South Africa, setting itself on a collision course with Capitec Bank, the nation’s biggest provider of unsecured loans.
The insurer is delving into an industry facing increased competition not only from new entrants, but also from the government and a rejuvenated African Bank following its emergence from a 2014 collapse. The ANC is seeking to create a state-owned lender, while the SA Post Office is aiming to use its 2 200 outlets to expand its offerings into a full retail bank.
Old Mutual chief executive Peter Moyo said: “The question is, ‘do we partner or do we build it for ourselves? “We’re actually in the process of thinking about it.”
It does not have its own banking license and offers transactional-banking services through a partnership with Bidvest Bank. Its thrust into banking won’t clash with an agreement the insurer has with Nedbank, Moyo said.
Old Mutual is cutting its stake in Nedbank, which counts mainly middle- to higher-income earners among its clients, to 19.9% by the end of the year.
Not just banking
“We’re actually stronger I would say than Nedbank in the lower income segment,” Moyo said. “It’s not just about banking.”
The insurer distributes and sells personal loans, savings products as well as funeral and other insurance cover through brokers, its website and 332 branches around the country.
Its personal loans book increased by 11% to R13.4 billion in the six months through June from a year earlier. Capitec has 826 branches, almost 10 million clients and a R48 billion loan book.
Core a ack
The 173-year-old insurer is opening as many as 40 000 new bank accounts a month through its partnership with Bidvest, said Clarence Nethengwe, managing director of the Mass and Foundation Cluster.
Old Mutual joins at least four other companies. Discovery, SA’s largest health-insurance administrator, plans to start a service within months. – Bloomberg
Moneyweb
The share price of global engineering group Murray & Roberts dropped 1.16% to R16.13 this week, following the announcement of the group’s yearly results shortly before market close yesterday.
This is well short of the R17 per share German group Aton is offering shareholders in its mandatory offer that could expire in March next year.
At a results presentation , independent advisory board member
increased by 11% to 50 cents per ordinary share, compared to 45 cents in the previous financial year.
The oil and gas platform contributed R8.5 billion in revenue and R209 million in operating profit at a 2% operating margin, reduced from 3% in the previous financial year.
CEO Henry Laas said: “The group has transformed from being a predominantly SA civil and building contractor, to a multinational engineering and construction group focused on the natural