Old Mutual swings to profit in HY23
BUSINESS REPORTER
Zimbabwe’s largest financial services group, Old Mutual Zimbabwe, outperformed expectations , reporting a net profit of ZWL$628.96bn profit in the six months to June 30, 2023 compared to a loss of ZWL$103.18bn reported in the prior comparative period, Business Times can report.
The group’s overall revenue increased to ZWL$825 trillion from ZWL$223 trillion in the comparable prior year.
The value of all assets was revised from a comparative value of ZWL$3.16 trillion in 2022 to ZWL$8.21 trillion during the period under review.
The company has invested US$13.7 million in alternative investments, such as renewable energy, agriculture, and real estate, as part of the group’s drive to diversify and expand cash flow, according to Group CEO Samuel Matsekete, who was speaking at the company’s analyst briefing.
“We made an investment in real estate in Ngezi that houses equipment that processes gold and platinum, and that is part of the US$13.7m we have deployed, and this plant was for US$2.5m,” he said during an analyst briefing for the group’s interim financials to June 30, 2023.
In order to fill in the energy supply gaps in the nation, Old Mutual Zimbabwe previously committed to continuing to invest in more solar energy projects.
In 2021, Old Mutual and its partner SolGas commissioned the US$7.3m SolGas Energy 5 megawatt (MW) solar plant at Cross Mabale in Hwange district.
However, Matsekete said that in addition to investments in the Zimcampas student accommodation project in Bulawayo, there were also the ongoing Centragrid and Great Zimbabwe hydropower projects.
He said the group’s increased exposure to alternative investments such as energy and real estate would also see less exposure to traditional assets.
Matsekete said the group has established partnerships to support the mobilization of resources for lending and investment in client ventures and key sectors of the economy.
During the period under review, the group’s banking subsidiary CABS foreign currency loans accounted for over 90% of the total loan book.
The Old Mutual boss said agriculture and energy sector lending contributions increased to 46% compared to 39% in financial year 22 and 20%, respectively.
The non-performing loan ratio of 0.2% was well within regulatory and internal limits. The bank’s foreign currency deposits closed at 92% of total deposits, up from 59%.
Total deposits increased by 77%, driven by an increase in US dollar deposits. The shift of balance sheet weight to US dollars, Matsekete noted, also reflected in reduced interest margins to 16.9%, from 22.8% in the prior year.
Old Mutual Zimbabwe’s total equities were valued at ZWL$2,55 trillion at the end of the period under review with 73,96% and 26,035, respectively, being unlisted and listed equities.
Total investment returns rose to ZWL$3,44 trillion during the half year ended June 30, 2023, a significant increase from a 2022 comparative of ZWL$122,26bn.
