Old Mutual looking to emerging markets

South African financial conglomerate Old Mutual said it saw positive net client cash flows throughout the group in the first quarter, while sales continued to be strong in emerging markets.

Net client cash flow from core operations in the first quarter of 2012 was positive at £3.7bn, having been negative to the tune of £2.8bn in the corresponding period of 2011.

Funds under management in its core operations rose 7% to £284.2bn from £264.7bn at the end of 2011; the end-2011 number has been adjusted to strip out exchange rate (FX) fluctuations. Equity markets contributed £16.9bn of the £19.5bn increase.

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Total life assurance sales on an annual premium equivalent (APE) basis fell 10% to £269m from an FX-adjusted figure of £299m for the first quarter of 2011. While sales in emerging markets improved by 10% to £116m from an adjusted £106m the year before, long term savings sales in the wealth management business tumbled 21% to £153m from an adjusted £193m in the first quarter of 2011.

"The prolonged turmoil in the eurozone has continued to undermine investor confidence creating a subdued retail investment market in Europe as a whole," noted Julian Roberts, the Group Chief Executive of Old Mutual.

Total non-covered sales for the group improved 9% to £3,402m from an FX-adjusted figure of £3,127m in the first quarter of 2011.

At March 31st 2012, the holding company had total liquidity headroom of £3.4bn, up from £1.5bn at the end of 2011. From these resources the group will pay £1.0bn out as a special dividend and £0.1bn will be doled out as ordinary dividends on June 7th 2012. As part of the dividend payment process, the group settled its inter-company loan with its South African holding company.

"Our strong franchises and significant exposure to higher growth emerging markets underpin prospects for the year as a whole," Roberts claimed.

JH