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Old Mutual Ltd Chair Trevor Manuel says ‘lack of strong leadership and political will’ has made the ‘epidemic’ of crime and corruption in South Africa worse.
In a letter to shareholders, Manuel also wrote in the company’s latest annual financial statements, released on Friday, that electricity loadshedding had hurt its daily operations in South Africa, especially at branch level.
The country is entitled to a speedy resolution to rampant corruption, unchecked crime and alarming descent into lawlessness, South Africa’s former finance minister said.
In addition, there needs to be a swift response to the infrastructure requirements, both in respect of new builds and, perhaps more importantly, infrastructure maintenance, Manuel said.
Old Mutual, he said, remains fully committed to working with government to improve on the conditions for doing business in the country.
This covers regulatory certainty, response times for regulators and administrators, and the general applications and consistency of rules, the non-executive chair said.
The Anglo-South African financial services firm reported its annual financial results for 2022 on March 14.
‘2022 proved to be both a challenging and rewarding year for the group and our stakeholders. We returned to growth despite a difficult economic environment characterised by rising inflation and interest rates,
as well as fiscal pressures from increased debt repayments,’ Manuel wrote.
The easing of Covid-19 pandemic pressures was offset by an increase in weather-related catastrophe events, while the ongoing geopolitical crisis in Europe heightened market uncertainties, he said.
For 2022, the group saw its pretax profit drop by 31% to R 9.20 billion in 2022 from R 13.43 billion in 2021. Revenue slumped to R 113.21 billion, down 54% from R 247.81 billion.
Gross flows were 9% lower at R 178.03 billion from R 194.80 billion because results in the prior year included large transactions in Old Mutual Investments and Old Mutual Corporate, which did not repeat in the current year.
Funds under management fell by 4% to R 1.228 trillion from R 1.273 trillion, thanks to weaker market performance in South Africa and globally.
The group reported negative net client cash flow amounting to R 12.43 billion, compared to growth of R 92 million. This was primarily due to the decline in gross flows combined with large disinvestments and terminations in Wealth Management and Old Mutual Investments respectively.
In a letter, Manuel said the company expects the operating environment to remain uncertain, conceding headwinds are formidable.
Shares in Old Mutual rose by 0.6% to R 11.34 on Friday afternoon in Johannesburg. In London, they gained 1.0% to 50.59 pence.
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