Old Mutual: ‘Bermuda Unit’s Good Management’
Old Mutual’s Bermuda unit balance is still worrying investors but the UK-based global chief of the international long-term savings group says the Hamilton-based subsidiary has rebounded and is now performing well.
Established in 1845 in South Africa, Old Mutual now operates in 33 countries.
Old Mutual said this week third-quarter revenue rose eight percent, helped by growth in Africa, Asia and Latin America.
Speaking from Cape Town after delivering via teleconference an upbeat quarterly trading update to global analysts and financial media, Old Mutual CEO Julian Roberts said: “Old Mutual has stayed its course despite being buffeted by the global financial crisis, the turmoil in Europe and fiscal problems in the US.
“We are performing in accordance with our expectations,” Mr Roberts says, singling out the growth in sales in emerging markets, in Europe and in the Nordic countries.
“When you look at the number of new customers we gained in South Africa, the doubling of the assets on our platform in the UK, the Bermuda business is now under control and [under] good management, I think we have got a business that is now in a much better shape than it was three years ago.
“We have a good business and there might be issues with some in Europe but our businesses are performing strongly and I am optimistic about the future.
“Clearly we would want a more settled global economy,” he added.
In 2008 Old Mutual shares tumbled on international stock markets after the company admitted shoring up its flagging Bermuda business with an emergency cash injection of £150 million.
Group chief executive Jim Sutcliffe then described the performance of Old Mutual Bermuda as a “major disappointment”, warning that the total sales could fall by 35 percent at the unit’s parent division, US Life, as a result.
The South African financial group’s interim report said problems in Bermuda began with the sale of variable annuities carrying minimum return guarantees to primarily Asian clients.
It added that the unit was unable to raise enough to meet the guarantees, due to “ineffective” hedging policies worsened by turmoil in the Asian markets.
Ongoing problems with the Bermuda subsidiary were blamed for dragging Old Mutual’s share value down for the next two years.
Old Mutual [Bermuda] Ltd. was formed in May 2000 in Bermuda as a long-term insurer, which authorizes it to, among other things, issue international investment plans to non-Bermuda residents.
Through a select group of leading financial institutions and advisors, Old Mutual Bermuda’s investment plans allows its customers to select from a wide range of investment choices.
Old Mutual Bermuda brings its investment plans to clients in more than a hundred countries.
