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Old Mutual is looking to save £10 million (R174 million) from next year as a result of reducing the number of people employed at its head office in London from 275 to 140 people, according to Old Mutual spokesperson William Baldwin-Charles.
Old Mutual is in the process of splitting into four parts: Old Mutual Asset Management, in which Old Mutual has a 66 percent stake, Old Mutual Wealth, Old Mutual Emerging Markets and reducing its stake in Nedbank from a controlling stake to a minority stake.
Ralph Mupita, Old Mutual Emerging Markets CEO, said during an interview that a small team of between 10 and 15 people, out of Old Mutual’s total staff of 30 000 people, were dedicated to working on the separation of the group that is expected to be completed in 2018.
Old Mutual Group CEO, Bruce Hemphill, said the breaking up of the group was aimed at ‘unlocking value’ through improving business performance, reducing costs of central activities and reducing group debt.
This would result in investors rerating the valuation of Old Mutual’s assets and remove the ‘conglomerate discount’ that existed.
Hemphill said that so far business readiness project teams had been set up, board structures reviewed, detailed transition planning had been done and Old Mutual had sold its wealth unit in Italy for 278 million euro.
Mupita said that once Old Mutual Emerging Markets was a separate company it was likely to be known as ‘Old Mutual’ while Old Mutual Asset Management was likely to be rebranded once it was a stand alone company.
Old Mutual has a 26 percent stake in an Indian life insurance joint venture with Kotak Mahindra.
Mupita said that Old Mutual’s life insurance sales in emerging markets were growing at 25 percent a year while in India, Old Mutual was experiencing growth of 55 percent a year.
He said no decision had been made for Old Mutual to increase its stake in the joint venture.
In its results booklet, Old Mutual said it expected the South African economy to contract by 0.1 percent this year with the growth forecast at risk of being reduced.
