Old Mutual Zimbabwe’s shareholders have approved a restructuring exercise which will see the Group’s operations being consolidated into three units.
The consolidation will be based on the major lines of businesses operated by the group namely, insurance, wealth management and banking.
At an AGM held on Wednesday, shareholders unanimously voted in favour of the restructuring which was tabled a month ago and was in line with the parent company’s strategy to realign the overall group’s operations.
Consequently, Old Mutual Property Zimbabwe (Pvt) Ltd and Old Mutual Real Estate Zimbabwe (Pvt) Ltd will be merged together with Old Mutual Zimbabwe Investment Limited into Old Mutual Investment Group Zimbabwe.
CABS and CABS Custodial Service (Pvt) Ltd will be merged, as well as Old Mutual Property Investment Corporation (Pvt) Ltd and Old Mutual Life Assurance Company Zimbabwe Limited.
Shared Services Private Ltd, which is owned by Old Mutual Zimbabwe, will likewise subsumed into other retained units.
The restructuring exercise is expected to result in a huge cost savings and a simplified operating structure.
Meanwhile, the group says its operations across the portfolio are beginning to recover from the shocks that were occasioned by policy announcements made in the first quarter of this year.
In February this year, the Reserve Bank of Zimbabwe Governor Dr John Mangudya announced the introduction of an interbank market for foreign currency, as well as the introduction of the RTGS$ as a functional currency incorporating RTGS balances and bond notes.
These caused shocks across the financial services sector and had a knock-on effect on business in the first quarter.
Old Mutual group chief operations officer Isiah Mashinya indicated the market had since adjusted, with business beginning to normalise.
“Performance across all our operations has remained resilient and actually normalising from the impact of the transition to the new currency regime,” he told shareholders at the AGM.
Profits have also remained in line with expectations, while expense growth was managed to levels below the year-on-year inflation numbers released for the first quarter of the year.
Like any other sector in Zimbabwe, the financial services sector was not spared from the economic volatility experienced in the country, with customers adjusting to policy changes announced during the quarter.
“The business faced challenges in the operating environment, especially in the first quarter in line with general patterns observed in the market.
“The most significant were the introduction of the interbank market and as well as the introduction of the RTGS dollar as the new currency,” he said.
The business was also affected by the depressed performance of the Zimbabwe Stock Exchange (ZSE), which remained depressed in the quarter before recovery in April.
Stocks shed 17 percent in the first quarter of 2019 amid monetary changes and a shift in the general business environment in the quarter.
The equities market has however started to show signs of recovery since April, helping narrow year-to- date losses, a trend that is anticipated to continue. Despite the obtaining challenges, management at Old Mutual remains upbeat of a positive performance this year.
“We continue to stay close to our customers and or market developments and our capital base remains adequate,” said Mr Mashinya.