Financial services group Old Mutual has dropped profit in the first half of 2026 as weaker investment returns and lower insurance earnings offset underlying operating performance.
IFRS profit after tax attributable to shareholders dropped 5% to R3.89 billion from R4.1% billion reported in the same period last year. Headline earnings also declined 5.5% to R3.93 billion, while adjusted headline earnings took a sharp fall of 30% to R2.95 billion.
The impact was due to the ongoing Middle East war, which has negatively affected equity and bond markets, which drove the weaker investment performance.
“This should be seen against sharp risk-off conditions driven by ongoing geopolitical conflicts in the Middle East which have negatively impacted equity and bond performance,” Old Mutual said.
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The decline in profit came despite an improvement in Old Mutual underlying operating performance, which increased 7% to R5.28 billion. This was supported by growth in Old Mutual Life and Savings earnings and contributions from Old Mutual Investments and Old Mutual Africa Regions.
The stronger operating performance was partly reduced by weaker earnings from Old Mutual Insure compared with the previous period, as well as spending on the expansion of Old Mutual Banking.
The life businesses were also affected by unfavourable economic movements during the period, unlike the positive impact seen in the previous year.
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“Despite the elevated catastrophe losses during the period, the net underwriting margin in Old Mutual Insure of 7.6% remained at the upper-end of the medium-term target range of 5% to 8%, with underwriting profitability supported by disciplined underwriting, effective claims management and a diversified portfolio,” the group said.
Despite the decline in earnings, Old Mutual increased its interim dividend by 8% to 40 cents per share. The group also announced a R1 billion share buyback as part of its capital management plans.
Old Mutual said its shareholder solvency ratio remained strong at 172%, while discretionary capital stood at R3.1 billion after the R3 billion share buyback. The group expects a R4 billion dividend from the Old Mutual Life Assurance Company South Africa (OMLACSA) in the second half of the year, which it said would contribute at least R2 billion to discretionary capital.
- Old Mutual's IFRS profit after tax attributable to shareholders dropped 5% to R3.89 billion in the first half of 2026, affected by weaker investment returns and lower insurance earnings.
- Headline earnings declined 5.5% to R3.93 billion and adjusted headline earnings fell 30% to R2.95 billion due to the impact of the ongoing Middle East war on equity and bond markets.
- Underlying operating performance improved by 7% to R5.28 billion, driven by growth in Old Mutual Life and Savings earnings and contributions from Old Mutual Investments and Africa Regions.
- Old Mutual Insure's net underwriting margin remained strong at 7.6%, within the medium-term target range, despite elevated catastrophe losses.
- The group increased its interim dividend by 8% to 40 cents per share and announced a R1 billion share buyback, with a strong shareholder solvency ratio of 172% and discretionary capital of R3.1 billion.
Financial services group Old Mutual has dropped profit in the first half of 2026 as weaker investment returns and lower insurance earnings offset underlying operating performance.
IFRS profit after tax attributable to shareholders dropped 5% to R3.89 billion from R4.1% billion reported in the same period last year.
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READ: Roger Jardine replaces Trevor Manuel as Old Mutual Chair
READ: SA life insurers' assets surpass R5-trillion
“Despite the elevated catastrophe losses during the period, the net underwriting margin in Old Mutual Insure of 7.6% remained at the upper-end of the medium-term target range of 5% to 8%, with underwriting profitability supported by disciplined underwriting, effective claims management and a diversified portfolio,” the group said.
Despite the decline in earnings, Old Mutual increased its interim dividend by 8% to 40 cents per share.
Old Mutual said its shareholder solvency ratio remained strong at 172%, while discretionary capital stood at R3.1 billion after the R3 billion share buyback.
