Durban - The Sanlam Group on Wednesday reported an 11 percent growth in total new business volumes to R195 billion for the ten months to end October, boosted by Sanlam Emerging Markets new business growth of 67 percent, a weaker average rand exchange rate and the impact of corporate activity.
The group announced that normalised headline earnings per share were down by 8 percent during the period.
Chief executive Ian Kirk said yesterday: “We are satisfied with our operational performance in the first 10 months of the financial year.
"We remain focused on executing our strategy, as we believe it will enable us to sustain performance in the long term.”
The group said it would release its financial results for the year to end December in March next year.
Sanlam said most businesses contributed satisfactory growth, apart from Sanlam Investment Management, where fund-based fee income was impacted by lower average market levels.
The group reported overall net fund inflows of R32 billion, a solid growth which increased 190.91 percent compared to R11 billion achieved in the comparable 10-month period in 2015, with most businesses contributing to the higher net inflows.
Sanlam also reported moderate growth in some of its businesses with the New Life business volumes only increasing by 5percent as a result of combined effect of lower annuity sales in Botswana and good growth in the other regions.
Investment business grew by 96 percent, supported by a R4.6bn new mandate from the Botswana Public Officers Pension Fund.
Recent acquisitions, including Saham Finances and investments in Zimbabwe, continued to contribute to operational growth in 2016.
Sanlam announced in November 2015 that it would buy nearly one-third of Morocco’s Saham Finances for $375 million (R5.13 billion) as part of a strategy to look for new streams of income to offset slowing growth in South Africa.
Glacier achieved overall growth of 5 percent as demand for discretionary savings products remained under pressure.
Glacier life business sales grew by 16 percent, with strong demand for its offshore and wrap product solutions.
Santam’s net underwriting margin for the 10-month period was slightly below the midpoint of the target range of 4 percent to 8 percent.
The personal, commercial and specialist intermediated business lines were impacted by weather related catastrophe events in July and October 2016 and a number of large commercial fire losses.
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The group said MiWay maintained its growth momentum and Santam Re made a positive contribution to the underwriting results.
The group said all of its operations remain well capitalised, with a strong cash balance in its balance sheet and a R3.1 billion excess capital available for redeployment.
Sanlam said it expected the economic and operating environment to remain challenging for the remainder of 2016, with a resulting impact on the group’s key operational performance indicators.
“A number of factors are likely to impact on the group’s ability to maintain the 10-month growth rate in net results from financial services for the full 2016 financial year, including average investment market levels, the strengthening in the rand exchange rate and the high comparable 2015 base for performance fees at Sanlam Investments,” the group said.
Sanlam shares rose 2.24 percent on the JSE yesterday to close at R60.77.