Old Mutual forays into tourism sector

September 16, 2021

TINASHE MAKICHI

 

Zimbabwe’s largest financial services group, Old Mutual Zimbabwe Limited (OMZL), is investing heavily in tourism assets as the group sees massive potential in the sector, Business Times can report.

In the first half of the year, the group acquired a piece of land in the resort town of Victoria Falls. The land is located along the Zambezi River gorge.

OMZL is also constructing a hotel in Victoria Falls, Palm River Hotel, in a joint venture partnership.

“This development creates additional exposure to tourism assets in the fast-developing Victoria Falls area,” OMZL chief executive Samuel Matsekete said.

He said the company during the period under review also deployed about US$18.4m into private equity and infrastructure-related projects.

“We continue to seek opportunities where we can collaborate with regulatory authorities with a view to developing prescribed assets that preserve value for customers and protect policyholder investments in the current environment,” Matsekete said.

OMZL reported a profit of ZWL$11bn up from ZWL$8.9bn achieved in the same period last year.

Total assets for the group grew 23% from ZWL$114.6bn at the end of December 31, 2020 to ZWL$141.3bn on June 30, 2021, with nominal growth of 51% higher than inflation for the year to June 30, 2021, of 20.69%.

The Life and general insurance businesses net earned premiums grew 517% to ZWL$3.3bn in the period under review from ZWL$534.4m in 2020 on the increases in the nominal value of premiums due to the impact of inflation and currency depreciation as well as growth in volumes, Matsekete said.

He said investment returns were ZWL$41.7bn up from ZWL$31.2bn in the prior year driven by significant gains on listed equities and translation of foreign currency-denominated investments.

Banking interest income increased by 494% to ZWL$2.2bn driven by growth in interest earning assets, which were influenced by a combination of translation of loans denominated in foreign currency, local currency inflation, and growth in lending activity.

Fees and commission income grew by 460% to ZWL$2.8bn driven by growth in the volume of transactions in the digital and internet banking space and an increase in nominal values of transactions.

Operating and administration expenses increased 443% to ZWL$2.8bn from ZWL$511.7bn in the comparable prior period, driven by inflationary pressures and currency devaluation impacts on foreign denominated expenses.

Matsekete said the business has also been spending on new initiatives designed to make the business future-fit and on new products and services designed to improve customer experiences and offer market-relevant products.

The group’s consolidated net equity increased by 95% from ZWL$15.2bn to ZWL$29.6bn driven by growth in profit.

 

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