Old Mutual gets US$160m for key economic sectors

Source: Old Mutual gets US$160m for key economic sectors | The Sunday Mail

Business Reporter

OLD Mutual Zimbabwe sees huge potential in the country’s economy and has mobilised US$160 million in lines of credit to support key sectors.

In an interview after presentation of financials for the year ended December 31, 2024 in Harare last week, group chief executive officer Mr Samuel Matsekete said the commitment to support the economy remained strong.

“Over the just-concluded year, we mobilised an additional US$60 million, taking us to about US$160 million that we have.

“Most of our efforts in the first half will be to deploy that cumulative US$160 million to ensure that it’s utilised.

“We have also seen some of that needing to be modified because the uptake requires us to look at what our customers are demanding,” he said.

The group, he added, had made several investments in renewable energy, infrastructure value chains in agriculture, mining and tourism, among other key sectors of the economy.

“We are looking at Old Mutual now having participated in projects that are underway upwards of 42 megawatts, and we have got more that are coming through,” he revealed.

Mr Matsekete said the US$100 million renewable energy fund that was launched last year in partnership with the Government, the United Nations and other private sector players shows commitment to support economic development.

“We have invested in infrastructure support value chains like tourism as well as supportive value chains in manufacturing, and all of these assets we can also count as our ways to support the national growth agenda,” he said.

Old Mutual has since provided financial education to 36 991 individuals through face-to-face engagements.

It also introduced new products on the O’mari services to promote financial inclusion and offered loans and transactional services to underserved segments through its financial services businesses — CABS, Old Mutual Financial Services and O’mari.

During presentation of the group’s financials, Mr Matsekete said there was a 56 percent growth in customers in the year under review.

The main drivers of new business were O’mari, as well as funeral services and funeral product insurance.

“We widened our footprint in certain areas, and at the bank, we launched the NGO centre, offering specialised services or focused services on global development organisations and non-governmental organisations that operate in our markets.

“But we also expanded the service centres for the funeral services, and we increased the agents that we are deploying in terms of sales of our various products, and that also includes partnerships that we expanded during the year,” he said.

The group, he added, would continue to broaden the assets that it invests in.

“Within the alternative assets portfolio, a broader range of assets that we are bringing into the portfolios, some of them respond to fiscal requirements from our customers.

“We also established an advisory services business unit, which is carried within the CABS business but serves customers from across the board,” he said.

Mr Matsekete said the group life assurance business’ net client cash flows were up by 17 percent from the prior year, driven by repositioned efforts in terms of contributions to pensions and long-term life insurance products.

“You will also see us achieving high investment returns for the products that we carry through the life business, which enable us to deliver consistent bonus declarations from those products that are weak points in the life business for the year,” he said.

During the year under review, the group expanded the funeral distribution network, which resulted in a 49 percent growth in the funeral policies.

“The growth rate is really supported by the growth points of how we deliver the service in that new life of business.

‘‘The funeral services business is one of the two new businesses that we are still nurturing, and we are very encouraged by the trajectory of the funeral services business.”

Old Mutual continues to upgrade digital platforms and strengthen the core key propositions: digital banking, international payments and trade and exchange control.

The business will also continue to scale up the microfinance space, where it now holds an 8 percent market share.

“It is a new baby, but we are happy to have made this one up so that we can try and fit O’mari in our services. O’mari customer base was up 113 percent year-on-year.”

In the life business, insurance revenue grew by 26 percent owing to higher business underwritten.

The pension administration business, however, sustained an expense ratio of 126 percent, reflecting the impact of capped fees on certain fee lines.

“The general insurance business registered an underwriting margin of 14 percent, anchored by a strong underwriting discipline and favourable claims outcome for the year,” reads part of the group’s financials.

In the banking and lending businesses, the mix of loans was skewed towards US dollar loans.

The group said increased volumes of US dollar transactions supported a growth of 17 percent in non-funded income.

“The quality of the loan book reflected a non-performing loan ratio of 1,5 per cent for CABS, which is better than the prior year’s 2,1 percent, and a portfolio-at-risk ratio of less than 10 percent for the micro-lending book.”

Funds under management in the investment management business line decreased by 6 percent year-on-year, impacted mainly by the trend of performance in the equity markets, whilst net client cash flows of ZIG1,9 billion were registered during the year, of which ZIG619 million was deployed into alternative assets.

Occupancy ratios for the property portfolio averaged 80 percent.