Liberty chief executive Bruce Hemphill. Photo: Nonhlanhla Kambule-Makgati.

Johannesburg - Liberty Holdings' operating earnings were up by 28 percent to R2.2 billion in the 2013 financial year, the group said on Thursday.

“Liberty Holdings Limited has reported a record set of results, the strongest in 10 years,” it said in a statement announcing its annual financial results.

“The group's performance has been driven by a combination of product innovation, robust new business, investment growth and the continued increase in assets under management.”

Indexed new business in the insurance business was up 14.7 percent to R6.9bn, while cash in-flows in the asset management division grew by 10 percent to R15.7bn, Liberty said.

Total assets under management grew by 15.7 percent to R611bn.

The group reported a return on equity of 23.3 percent, which was ahead of target, it said.

The Shareholder Investment Portfolio (SIP) had an overall portfolio return of 14.6 percent.

Liberty said the SIP benefited from strong developed market equity performance and significant rand depreciation.

The group had a capital adequacy ratio 2.56 times the regulatory minimum.

It declared a final dividend of 369 cents per share, bringing the total normal dividend for 2013 to 581 cents per share.

This was up 10 percent from 2012.

“I am pleased to report an excellent set of financial results for the 2013 financial year,” chief executive Bruce Hemphill said.

“This set of results is testament to our strategic focus on the retail affluent market, while simultaneously pursuing revenue diversification for long term sustainability.”

In the group's retail segment, Retail SA produced excellent results, Liberty said.

BEE normalised headline earnings increased by 24 percent to R1467 million. This was underpinned by strong policy retention rates and annual contractual escalations, it said.

New business and new business margins increased to R742m and 2.4 percent respectively.

Indexed new business sales (excluding contractual increases) increased 13 percent to R6bn.

The new Evolve range of products provided robust new business sales of R3.6bn, Liberty said.

Credit life sales from the Standard Bank partnership were up 17 percent.

Retail SA reported strong net cash inflows in excess of R6bn.

Liberty Retail LISP (GateWay), since inception in October had attracted almost R1bn of cash inflows.

The group said Libfin continued to make a positive contribution to group profit through the management of market volatility and the risks associated with products sold.

The SIP, which Libfin managed, delivered a gross investment return of 14.6 percent, which translated to R1.9bn in earnings.

LibFin Markets continued to contain market risk exposure despite significant interest rate and emerging market volatility.

The credit portfolio assets contributed R132m to headline earnings, the group said.

Stanlib reported headline earnings of R571m, which was 17 percent higher than the comparable period last year.

Earnings had benefited from gross free income growth of 16 percent.

Liberty said cash flows of R21.7bn brought assets under management to R507bn.

Stanlib Africa reported headline earnings of R62m, 29 percent higher than 2012.

Assets under management remained high at R38bn.

Liberty properties earnings were R44m last year compared to R39m in 2012.

In Liberty's institutional segments, Liberty Corporate's headline earnings increased by 83 percent to R121m.

It had an indexed new business increase of 29 percent to R789m.

Liberty Africa Insurance reported earnings of R52m, well above the prior year's earnings of R21m, the group said.

Long-term insurance new business margins was at 9.2 percent.

Liberty Health reported an anticipated loss of R40m.

“While recent operational efficiencies are producing better cost ratios, the business does not, as yet, have sufficient scale to leverage the investment in systems and processes,” Liberty said.

Liberty said its partnership with Standard Bank continued to contribute positively to new business development and new business.

Indexed new business from the bank's channels amounted to R2.9bn, which was a 17.2 percent increase.

“The results reflect good progress in the transformation of Liberty into a sub-Saharan Africa financial services organisation, while regaining market leadership in the Retail SA affluent sector,” Hemphill said.

“We are seeing strong new business performance through innovative, customer appropriate products and bottom line growth through strong cost containment and retention.” - Sapa