Harare - Old Mutual has said that its Zimbabwe unit was pinning its hopes on limiting its exposure to fragile assets as it prepares for economic and operational turbulence in the country.
The listed unit said on Wednesday that it would strengthen its banking, life assurance and short-term insurance units as its total assets grew 9percent to $2.1 billion (R27.3 billion) against liabilities of $1.7 billion.
“Uncertainties in our economy will continue, but, from a business perspective, it is important to remain alert and to respond to changes in the environment that may arise in the economy,” chief executive Jonas Mushosho said.
The company said it managed to increase total revenues 126 percent to $460 million despite monetary assets becoming risky as a result of liquidity constraints in Zimbabwe.
“It is now a good time to increase our assets in real assets, and that is in equities and the property sector,” Mushosho said in Harare.
The asset management unit recorded a 13 percent increase in the value of funds under management, although net income from fees was 4 percent lower compared with the previous year.
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Basic and diluted earnings a share increased from 3.7 cents in 2015 to 26.7c for the year to December 2016, while adjusted operating profit came in at $76m.
The banking banking unit, CABS, recorded net surplus growth of 38 percent to $39.2 million on the back of stable net interest margins.
The life and short-term insurance businesses “registered growth” because of “new business underwritten”. Gross written premiums were 3 percent up at $188.8 million.
Operating income declined 27 percent to $21.8 million.
The company said investors were protecting themselves “from the perceived negative impact of bond notes on the value of monetary assets”.