Old Mutual's chief executive Julian Roberts. Picture: David Ritchie.

Johannesburg - Old Mutual, Africa’s biggest insurer, said it is planning an initial public offering (IPO) for its US asset-management business after the group’s profit rose 7.2 percent for the year.

“This offering will broaden US asset management’s access to capital to pursue future growth initiatives across its business,” the London-based insurer said in a statement today.

Net income from continuing operations after tax increased to 980 million pounds (R17.2 billion) for the fiscal year through December from 914 million pounds a year earlier, the company said in a separate statement, which highlighted continuing operations because the insurer sold assets in Europe from 2011 to 2012.

Adjusted earnings a share rose to 18.4 pence, almost in line with the 18.5 pence median estimate of nine analysts surveyed by Bloomberg.

The company also announced a final dividend of 6 pence.

Old Mutual has talked of an IPO for its US asset-management business since it slipped into losses in the wake of the 2008 global financial crisis.

Chief executive Julian Roberts maintained that the IPO would only take place once the unit was profitable and stable.

While the IPO will boost cash reserves this year, growth in emerging markets increased the insurer’s sales and profit in 2013.

“We are growing in South Africa, with more than 750,000 new Old Mutual and Nedbank customers,” Roberts said in the statement.

“We have taken significant steps in our goal of becoming Africa’s financial-services champion, with new businesses in East and West Africa and nearly 600,000 new customers.”

Old Mutual shares climbed 2.1 percent to 34.06 rand as of 9:16 a.m. in Johannesburg trading, its highest intraday level in more than a month. - Bloomberg News