Wrap Text
Annual Financial Report 2016 and Annual General Meeting 2017
OLD MUTUAL PLC
ISIN CODE: GB00B77J0862
JSE SHARE CODE: OML
NSX SHARE CODE: OLM
ISSUER CODE: OLOMOL
Old Mutual plc
Ref 75/17
11 April 2017
ANNUAL FINANCIAL REPORT 2016 AND ANNUAL GENERAL MEETING 2017
Old Mutual plc (the “Company”) has today published its Annual Financial Report for 2016. Copies of the Annual
Financial Report, the Strategic Report for 2016, the shareholder circular containing Notice of the 2017 Annual
General Meeting (AGM) and the Form of Proxy for the AGM have been submitted to the National Storage
Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do. These documents will also
be available later today on the Company’s own website at www.oldmutualplc.com. Copies of the Annual
Financial Report may also be obtained from Investor Relations, Old Mutual plc, 5th Floor, Millennium Bridge
House, 2 Lambeth Hill, London EC4V 4GG or Old Mutual Square, Isibaya Building, 2nd Floor, 93 Grayston Drive,
Sandton 2196, South Africa.
The Company’s Annual General Meeting will be held in the Presentation Suite, 2nd Floor, Millennium Bridge
House, 2 Lambeth Hill, London EC4V 4GG on Thursday, 25 May 2017 at 11.00 a.m. (UK time). As in prior years,
the AGM will be webcast via the Company’s website www.oldmutualplc.com.
The Company notes a correction to the stated 2014 LTIP outcome on page 123 of the Annual Financial Report. In
the disclosure of the strategic objective of “Effective risk management and run-off of the Old Mutual Bermuda
business” the liabilities at the end of 2016 are incorrectly stated as c. $1.0bn. The liabilities should be presented
as c. $0.1bn.
Today Old Mutual plc also publishes its Positive Futures Plan. This year the Plan focuses on how our businesses
will continue to deliver on the Plan post managed separation. For more information on how we will continue our
support for socio-economic transformation in societies please read the report www.oldmutualplc.com/annual-
report-2016.
In compliance with the Company's obligations under DTR 6.3.5, additional information is set out below which has
been extracted in full unedited text from the Annual Financial Report. Accordingly, page references and section
numbers in the text below refer to page numbers and section numbers in the Annual Financial Report. This
extracted information should be read in conjunction with the Company’s preliminary results announcement, which
was released on 9 March 2017 and is available on our website.
“Risks
The managed separation strategy represents an inflection point in the Group’s history. Its objective is to unlock
value for Old Mutual shareholders by placing four strong and well-capitalised businesses into the hands of
shareholders most suited to owning it and who are able to support their individual growth agenda. The plc’s
responsibility is to execute this strategy and to wind itself down in an orderly fashion. The plc intends to carry this
out with limited market dependencies, while maintaining strong management controls over the underlying
operations and mitigating risks as they crystallise.
Since the managed separation announcement in March 2016, the governance model has been revamped: the
Group’s ‘strategic controller’ model has evolved to an ‘active portfolio manager’ model where the plc evaluates
each of the Group’s businesses as an asset, with a view to realising maximum value through the managed
separation. The primary principle is that the businesses will be assessed individually: we will no longer seek
diversification benefits or synergies. The active portfolio manager model means a significant amount of
responsibility for meeting local capital and liquidity requirements has been delegated to the respective business
Boards as part of their move towards separation. However, as long as we remain a Group, the plc Board retains
overall responsibility as well as specific responsibility for plc-level risks and liability management.
For as long as we remain a group the principal risks we face remain broadly consistent with those described in
the 2015 Annual Report, albeit with different emphasis on some risks and new risks for the plc. In our UK and
American businesses, the risks to capital are small but the risks to earnings are very much dependent upon
market conditions, given their reliance on asset-based fees. This contrasts with our African businesses, where
macro conditions, particularly in South Africa, create risks to earnings, liquidity and local capital within the lending
and insurance operations.
Global macroeconomic risk in all our markets continues to be a key focus for the Group and for financial services
firms in general. The downside risk to the market buoyancy following the shift in risk sentiment after the US
presidential election is that global equity markets may be overpriced and may correct in the near future. This
exposes markets to the risk of overestimating the extent of stimulus measures expected from the Trump
administration. Developing markets will continue to be sensitive to the US interest rate cycle and the possibility of
a US protectionist agenda towards China, which may result in a souring of sentiment and a sell-off of emerging
market assets.
Intertwined with this is the growing focus on political risk and the impact of political risk on markets. In South
Africa, a sovereign credit downgrade to below investment grade status was averted in 2016 but remains a
significant risk. In the UK markets are likely to remain volatile, as the long-term economic impacts of Brexit come
to light; uncertainty and lower growth prospects could impact investor confidence.
Both macroeconomic and political risks are regularly assessed in group-wide stress and scenario testing. Given
the guaranteed products and annuity business within OMEM, as well as the accompanying hedging programmes
that could result in collateral calls and liquidity requirements, this will continue to be a focus over 2017. We have
significantly reduced market risk in Old Mutual Bermuda (OMB) through new hedging programmes, although
some residual risk remains, until the policies mature in 2018.
While the clear aims of managed separation have reduced ‘strategic vision’ risk, strategic execution risk has
increased. The strategy will address the prevailing risks presented by the our structure – namely currency
translation risk (translation of predominantly rand earnings to sterling), hard currency requirements (availability of
sterling flows to service sterling-denominated debt and plc Head Office costs) and fungibility restrictions (the
inability to recognise significant rand surplus in the Group’s regulatory Solvency II resources).
Plc Head Office is responsible for the execution of the managed separation; this has substantially changed its
focus to evaluating the different separation routes and potential corporate finance activities balancing value, cost,
time and risk. The businesses are strengthening their standalone governance and risk management capabilities.
The plc will need to manage legacy risks over a shorter timeframe than would otherwise have been the case and
ensure the plc is wound down in an orderly manner – projects are in place to address both areas.
We perceive regulatory risk to be higher, given the level of ‘thematic’ review activity in the UK and the delays in
implementing key regulations such as the Twin Peaks regime in South Africa.
Growth objectives in OMEM imply increasing credit risk, in particular within retail lending credit risk. Significant
initiatives in 2016 have improved credit and liquidity governance frameworks. These improvements give us
comfort that appropriate oversight capability is in place and will continue to develop as we move towards
separation.
The operating businesses still require ongoing investment to achieve the desired maturity of capabilities and
positioning within their chosen markets.
Finally, the scale of organisational change we are undergoing means we are particularly cognisant of culture and
people risk in the businesses and the plc. We will continue to manage our people and culture carefully as we all
work towards the common goals set out for managed separation.
Sue Kean
Group Chief Risk Officer
Principal risks and uncertainties
In 2016 our key principal risks have been updated to reflect the risks and opportunities of the managed separation
strategy. They have been determined by assessing the possible effects and challenges of unlocking the value in
each of the four individual businesses, and the impacts this could have on our reputation, stakeholders, earnings,
and capital and liquidity positions. These risks are summarised in the table below and are closely monitored and
overseen by plc management and regularly reported to the plc Board.
As long as we remain a Group, the key principal risks facing our businesses will remain in line with those reported
in 2015, with the managed separation placing a different emphasis on each risk. However, the managed
separation has substantially changed the plc’s risks (see page 78).
Our businesses are affected by a number of risks inherent to the products they offer and the industries they
operate in, such as exposure to market levels, interest rates, credit and liquidity as a consequence of insurance
liability risk. These drive a significant proportion of our capital requirements and earnings volatility exposure as
well as requirements for cash and liquidity buffers. Given the nature of our product offering, market and
environment risks are material: market movement impacts on asset-based fees generated from client-selected
investments and credit risk within Nedbank and OMEM is correlated to market conditions.
Our principal risks are detailed below. Additional risk information per business is in their business review sections.
Current impact Risk mitigation and
and risk outlook management actions
1. Global macroeconomic conditions
The current persistently volatile, uncertain, complex and ambiguous We regularly monitor multiple external economic
macroeconomic environments could impact consolidated Group factors and incorporate them into group-wide stress
profitability, as with all financial services firms. and scenario testing to understand our earnings,
liquidity and capital resilience to severe
OMAM, OMW and OMEM’s asset management businesses explicitly macroeconomic events.
seek market risk as part of their business strategies and are exposed to
asset-based fee risk. Market risk also arises through guaranteed In 2016 we undertook specific scenario testing on
business in OMEM and residual guarantees in OMB. the possible economic impacts of a South African
sovereign downgrade, Brexit and a Trump
In our insurance and investment businesses, and especially in OMEM, presidential election victory; these incorporated
our earnings are at risk if our customers exit our products at a different a range of possible outcomes and enabled us to
time to our expectations or where business volumes are lower. identity mitigating actions. The businesses also
perform testing on their own plans.
In our lending businesses, earnings are at risk if counterparties fail to
meet their interest and principal obligations, impacted by global In light of the managed separation strategy, we
economic conditions. Our exposure to South African sovereign debt lies have updated the plc’s financial risk appetite metrics
only within the local businesses. to focus on central liquidity resources, capital and
earnings volatility; these are updated dynamically
From a systemic risk point of view, Old Mutual Group Holdings (holding and projected over the managed separation period.
company above Old Mutual and Nedbank) has significant country risk
exposure to South Africa. Within OMEM, market and liquidity risks arising from
guaranteed products, and the hedges in place to
Looking forward manage them, are actively managed by the Balance
The long-term economic impacts of Brexit are unknown. The immediate Sheet Management team. Guaranteed products in
impact of the weakening pound against the South African rand and US OMB are managed through various hedging
dollar during 2016 has been favourable but the Group’s currency programmes.
translation risk remains. However, uncertainty and lower growth have
adversely affected net client cash flows in OMW. Asset-based fee risk is managed by offering
customers a comprehensive range of internally
Initial market reaction to Trump’s presidential election victory has seen managed investment solutions and by diversifying
markets rally and suggests anticipation of higher US growth, a stronger our product offering.
dollar and increasing interest rates. However, there is a risk that
expected stimulus measures may already be priced-in, and that these
expectations may be disappointed.
In South Africa, a sovereign credit downgrade to below investment
grade status was averted in 2016. But this risk remains in 2017, due to
the challenging growth outlook and political risk. US interest rate hikes,
putting pressure on South Africa’s own inflation and interest rates, and
persistent drought add further headwinds.
We are exposed to the risk of a short-term spike in interest rates
following a South African sovereign downgrade, which could result in
temporary liquidity strain arising from hedging collateral calls in OMEM.
In the UK, the process of formally applying to leave the EU under Article
50 could lead to market uncertainty that impacts sentiment and
confidence in the savings industry.
Current impact Risk mitigation and
and risk outlook management actions
The implementation of the managed separation is not market-
dependent, but volatile markets could impact the value realised: timing
of activities is being carefully managed to ensure value creation.
2. Political risk
Changing government policy and public sentiment in the key countries Old Mutual will continue to engage and
where we operate could potentially influence external perceptions of the work with relevant stakeholders to be alert to
Group, regulations and taxation governing our products, business political developments. The Boards of both our
ownership (impacting our customer base) and fungibility restrictions South African businesses and the Group continue
(particularly in South Africa). Political risk also creates additional risks in to monitor and assess the impact of political risks.
the macroeconomic environment (see page 74).
We are actively engaging with the South African
Political risk became particularly acute in 2016, as a Brexit vote in the government. This includes leading the engagement
UK and a Trump presidential election victory in the US defied the odds with government and South Africa’s ‘big businesses’
and market expectations. across financial services, mining, industrial and
telecommunications sectors, on ways to improve
Given the significant portion of our business in South Africa, we are sentiment on South Africa’s investment case and
particularly exposed to political developments there. Exposures include managing the sovereign ratings downgrade risk.
the business we receive from collective labour organisations and public This positive engagement was widely viewed as
sector workers, which presents the risk of mass exits from our products helping to avoid a sovereign downgrade in 2016.
following a change in sentiment.
Political risks are explicitly incorporated into our
In Zimbabwe, President Mugabe is adhering to the Indigenisation Act. stress and scenario testing. The scenario testing
Liquidity issues for the country continue, leading to the issuance of bond mentioned above, on the impacts of Brexit and
notes by the government in 2016. Social unrest persists, exacerbated a Trump presidency, included specific testing
by the lingering effects of drought. In OMEM, the consequence of this is on the political risk implications for our managed
increased growth in the Central African Building Society (CABS) separation. We plan to further enhance our
as people look to a quality provider; however, there is continuing risk testing over 2017.
over how the ongoing situation in Zimbabwe could affect the value of
CABS.
Looking forward
The effects of Brexit and Trump’s presidency election victory are yet
to be fully appreciated. With many large Eurozone country elections
in 2017, it remains to be seen whether the so-called populist trend will
continue.
The South African political arena is expected to remain polarised,
with significant leadership and transition uncertainty ahead of the
2017 African National Congress (ANC) conference and 2019 national
elections.
In Zimbabwe, given continuing economic crises and social unrest, 2017
is expected to bring further challenges. Tensions are likely to continue
to escalate between President Mugabe, opposition parties and his own
party membership.
Current impact Risk mitigation and
and risk outlook management actions
3. Strategic execution risk
For the foreseeable future, there is a high degree of execution risk A formal managed separation programme and
across the Group. In addition to the implementation of the managed governance structure have been established across
separation, we have major change programmes within the businesses, the Group, and where required external specialist
including the OMW and OMEM IT and business transformation resources and advisers have been brought on
programmes. ‘Strategic vision’ risk has been reduced by the clear aims board. There is regular interaction with key
set out for the managed separation. stakeholders including the various regulators.
Regulatory change across the Group remains high and affects the Each of the four businesses has its own managed
entire industry; many of these regulatory changes represent separation projects in place to ensure they
opportunities for our businesses. The cumulative impact could result in strengthen and enhance their governance
margin compression, resource strain and increased operational risk structures and activities previously undertaken or
during transition. Cyber risk remains a key challenge for the industry, supplemented by the plc.
with attacks becoming increasingly sophisticated.
Recommendations from external advisers on
In 2016 we created the building blocks for the managed separation. We OMEM and OMW’s IT programme have been
undertook extensive planning and stress and scenario testing regarding reviewed by their Boards and are being
the different routes by which we could achieve the managed separation, implemented. OMW’s programme has been
taking into account potential impacts on key stakeholders and our cash, replanned with enhanced governance structures.
capital and earnings positions. We have identified our current plans
which were formulated following extensive engagement with our key Specific managed separation-related risks are
stakeholders and technical advisers, and these discussions continue. It detailed below page 78.
should be noted that the managed separation of a diverse multinational
group is a highly complex matter. Thus, our initial plans remain subject Further information on mitigating actions within
to change, implementing the managed separation will require a balance the businesses can be found in each business
to be struck between the key criteria of value, cost, time and risk. As review section.
activities transfer from Old Mutual plc there will be a need to ensure
increased skills and resource capacity within the businesses.
Further information on specific challenges within individual businesses
can be found in the business review sections.
Looking forward
In 2016, regulatory focus in the UK and EU has largely been on
implementation, with Solvency II, the Prudential Regulation Authority
(PRA) Senior Insurance Managers Regime and the Market Abuse
Regulation coming into effect. In South Africa, 2016 was a year of
postponements to the introduction of key regulation including
Twin Peaks.
Regulatory focus in 2017 is expected to be on the implementation
of existing regulation rather than introducing a large amount of new
reforms. In the UK this is due to need for regulatory stability given the
uncertainty presented by Brexit and, in the US, the Trump
administration is expected to follow a deregulatory agenda.
4. Credit risk
One of the largest risks to Group earnings is our exposure to banking Credit risk received significant focus in 2016.
credit risk from lending and other financing activities through our We undertook reviews to ensure that individual
ownership of Nedbank – and to a lesser but growing extent within businesses’ credit risk management and
OMEM. governance frameworks are elevated to best
market practice levels, to ensure an appropriate
Nedbank is a universal bank offering diversified product lines across balance of risk and return.
secured and unsecured lending. Our exposure through Nedbank is
primarily a risk to earnings and remittances, as Nedbank’s capital and We carry out stress testing at Nedbank and
liquidity requirements are both met from its own available resources. OMEM (and, by extension, Group) to understand
Nedbank also has a credit exposure in Nigeria through its strategic exposure to credit events.
investment in ETI.
Nedbank has defined risk limits and early
Within OMEM, banking credit risk is increasing due to planned growth warning thresholds for credit loss ratios. These
as part of the strategy to become an integrated financial services were continuously monitored and remained within
business. Banking credit risk and associated funding risk arises in our their target range throughout 2016. Nedbank
unsecured lending businesses. Investment credit risk arises in Old also reviews the quality of credit portfolios to
Mutual Specialised Finance and the South African life business, ensure impairment provisions are adequate.
predominantly through the management of assets backing annuity
products. As the OMEM’s portfolio has grown, the business
is strengthening its own expertise and governance
Credit risk outside and concentration risk between Nedbank and of credit and liquidity risks. We have also sought
OMEM is relatively limited. external views on areas of greater risk, such
as our exposures to unsecured lending and
Looking forward wholesale lending. Further development of
Our credit risk remains within appetite. However, the high levels of the credit risk and liquidity risk management
personal indebtedness and pressure on consumers in South Africa framework will continue.
remain a challenge: the businesses continue to monitor this risk closely
against their credit risk appetite limits. For more information on credit risk in Nedbank
and OMEM see their business review sections.
As discussed earlier, appetite for the businesses’ products depends on
macroeconomic factors that are outside our control.
In line with Group strategy, credit risk increased in 2016, mainly within
OMEM’s growing lending and annuity businesses.
5. Currency translation risk, location of capital and sources of remittances
Our Group earnings, dividend and surplus capital are reported in The managed separation seeks to allow
sterling but most of our earnings and surplus capital are denominated in each business to have the appropriate capital
South African rand. The translation of our rand earnings and balance management to succeed independently and to
sheet value reflects exchange rate movements, and the managed be more closely aligned to its natural shareholder
separation will address this risk. base. Capital requirements will be met in matched
currencies, and interest on debt with matching
Our intention under the managed separation is to continue our phased earnings and cash flows.
reduction of our stake in OMAM. This will increase our short-term US
dollar currency translation risk. For 2017 dividend paid in currencies other
than sterling will be converted at the average
Our capital is held where our risks are located and in the appropriate effective exchange rate after taking into account
currency for those risks; so while risk can manifest in a business and hedging activities and timing of remittances for
reduce that business’s capital it would not have an impact on plc. the relevant period.
Due to exchange controls and terms of the demutualisation agreement, We continue to use forward currency contracts
capital from South Africa is not fully freely transferable. to hedge expected rand cashflows needed
to make dividend payments. This will remain
The Group’s overall solvency position is perversely impacted by under review in light of the uncertainties of the
currency movements, as the Solvency II fungibility restrictions managed separation.
mathematically reduce our solvency ratio as the rand strengthens.
Regular stress and scenario testing helps us
In 2016 the rand strengthened against the pound by 26% over the year, understand and monitor the resilience of our
due mainly to sterling’s weakness after the Brexit vote. This followed capital and liquidity over the business plan
three years of rand depreciation: 28% in 2015, 4% in 2014 and 27% in horizon. Our modelling shows we are sufficiently
2013. The size of movements in the past few years provides an capitalised in line with our philosophy of holding
indication of the rand’s relatively high volatility. capital where the risks lie.
Looking forward
The impact on the rand of Donald Trump’s administration is unclear.
Higher infrastructure spending could boost South Africa’s mining
industry and general commodity demand. On the other hand,
protectionism and hostility towards China could result in emerging
market sentiment souring and a risk asset sell-off.
Continuing political uncertainty and the threat of a sovereign downgrade
could weaken the rand and increase volatility.
Management of separation-related risks.
Plc Head Office is responsible for the execution of the managed separation; this has substantially changed its
focus to evaluating the different separation routes and potential corporate finance activities. We need to ensure
that:
- Managed separation will balance the key criteria of value, cost, time and risk
The different managed separation paths have been assessed in terms of the value, time, cost and risks while
minimising market dependency and maintaining flexibility. Detailed stress and scenario testing is undertaken
on the options and reassessed at each iteration.
- The four businesses are sufficiently well-capacitated to stand alone
Each business’s ability to stand alone has been evaluated. Detailed planning of actions to fill any gaps
identified has included the setting up of transition processes of skills and capabilities from the plc to the
individual businesses. Completion of these actions is being monitored centrally. The transition processes
cover the management of capital and liquidity adequacy and the capability of the risk functions.
- We continue to meet our governance and regulatory obligations
We have redefined our governance structure to give clarity on the new decision-making structures and due to
the increased level of corporate activity being undertaken we have enhanced our market abuse framework.
- The plc Head Office is wound down in an orderly manner
Plc has its own restructuring project, including the transition of required activities into the businesses. Legacy
items such as the pension scheme and the insurance captive have dedicated resource to ensure they are
effectively closed-out. The managed separation has increased people risk across the Group; this is
being managed at both Group and local level.”
“Related parties
The Group provides certain pension fund, insurance, banking and financial services to related parties. These are
conducted on an arm’s length basis and are not material to the Group’s results.
(a) Transactions with key management personnel, remuneration and other compensation
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the Group, directly or indirectly, including any Director (whether executive or otherwise)
of the Group. Details of the compensation paid to the Board of Directors as well as their shareholdings in the
Company are disclosed in the Remuneration Report on pages 104 to 139.
(b) Key management personnel remuneration and other compensation
Year ended Year ended
31 December 2016 31 December 2015
Number of Number of
personnel £’000 personnel £’000
Directors’ fees 11 1,584 11 1,388
Remuneration 25,133 24,293
Cash remuneration 14 6,228 12 5,308
Short-term employee benefits 14 9,828 12 8,678
Long-term employee benefits 14 280 12 378
Share-based payments 11 8,797 12 9,929
26,717 25,681
Share options Year ended Year ended
31 December 2016 31 December 2015
Number
of Number of
options/ options/
Number of shares Number of shares
personnel ’000s personnel ’000s
Outstanding at beginning of the year 4 52 5 48
Leavers – – 1 (11)
Granted during the year 6 29
Exercised during the year – (14)
Outstanding at end of the year 4 58 4 52
For the year ended 31 December 2016
J: Other notes continued
J3: Related parties continued
(c) Key management personnel remuneration and other compensation continued
Restricted shares Year ended Year ended
31 December 2016 31 December 2015
Number of Number of
options/ options/
Number of shares Number of shares
personnel ’000s personnel ’000s
Outstanding at beginning of the year 9 11,066 9 13,753
Leavers 2 (2,974) 1 (3,538)
New appointments 2 5,215 1 2,056
Granted during the year 11,566 3,055
Exercised during the year (206) (944)
Vested during the year (1,225) (3,316)
Outstanding at end of the year 9 23,442 9 11,066
(c) Key management personnel transactions
Key management personnel and members of their close family have undertaken transactions with Old Mutual plc
and its subsidiaries, joint ventures and associated undertakings in the normal course of business, details of which
are given below. For current accounts positive values indicate assets of the individual whilst for credit cards and
mortgages positive values indicate liabilities of the individual.
Year ended Year ended
31 December 2016 31 December 2015
Number
of Number of
personnel £000s personnel £000s
Current accounts
Balance at beginning of the year 5 2,208 5 2,435
Net movement during the year 743 (227)
Balance at end of the year 4 2,951 5 2,208
Credit cards
Balance at beginning of the year 5 20 4 29
Net movement during the year 10 (9)
Balance at end of the year 4 30 5 20
Mortgages
Balance at beginning of the year 3 110 5 465
Net movement during the year 11 (355)
Balance at end of the year 1 121 3 110
Property & casualty contracts
Total premium paid during the year 1 6 3 10
Life insurance products
Total sum assured/value of investment at end of the year 9 23,325 10 23,258
Pensions, termination benefits paid
Value of pension plans as at end of the year 9 3,339 10 4,675
Various members of key management personnel hold or have at various times during the year held, investments
managed by asset management businesses of the Group. These include unit trusts, mutual funds and hedge
funds. None of the amounts concerned are material in the context of the funds managed by the Group business
concerned, and all of the investments have been made by the individuals concerned either on terms which are
the same as those available to external clients generally or, where that is not the case, on the same preferential
terms as were available to employees of the business generally.”
“Related parties
Old Mutual plc enters into transactions with its subsidiaries in the normal course of business. These are
principally related to funding of the Group’s businesses and head office functions. Details of loans, including
balances due from/to the Company, are set out below. Disclosures in respect of the key management personnel
of the Company are included in the Group’s related parties disclosures in note J3.
There are no transactions entered into by the Company with associated undertakings.
£m
At At
31 31
December December
2016 2015
Balances due from subsidiaries 4,070 4,940
Balances due to subsidiaries (3,908) (4,368)
Balances due from other related parties – Nedgroup Trust Limited 16 2
Income statement information
At 31 December £m
Year ended 31 December 2016 Year ended 31 December 2015
Ordinary Other Ordinary Other
Interest dividends amounts Interest dividends amounts
received received paid received received paid
Subsidiaries 74 95 (108) 60 321 (97)”
“Responsibility statement of the Directors in respect of the annual financial report
We confirm that to the best of our knowledge:
- The financial statements, prepared in accordance with the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole, and
- The strategic report includes a fair review of the development and performance of the business and the
position of Old Mutual plc and the undertakings included in the consolidation taken as a whole, together with
a description of the principal risks and uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the Group’s position and performance, business
model and strategy.
Bruce Hemphill Ingrid Johnson
Group Chief Executive Group Finance Director
8 March 2017”
Enquiries
External communications
Patrick Bowes UK +44 20 7002 7440
Investor relations
Dominic Lagan UK +44 20 7002 7190
Sizwe Ndlovu SA +27 11 217 1163
Media
William Baldwin-Charles +44 20 7002 7133
+44 7834 524833
Notes to Editors
Old Mutual provides investment, savings, insurance and banking services to 19.4 million customers in Africa, the Americas,
Asia and Europe. Originating in South Africa in 1845, Old Mutual has been listed on the London and Johannesburg Stock
Exchanges, among others, since 1999.
Old Mutual is executing its strategy of managed separation, which will entail separating its four businesses into standalone
entities. The four businesses are:
Old Mutual Emerging Markets: an attractive business with a dominant position in South Africa, well-placed to capitalise on
sub-Saharan African growth as a diversified financial services provider with strong operations in key East and West African
markets.
Nedbank: one of South Africa’s four largest banks with very strong corporate, commercial and property finance franchises,
and a growth opportunity in the retail market, as well as pan-African optionality through its stake in Ecobank Transnational Inc
(ETI).
Old Mutual Wealth: a leading, integrated wealth management business, focused on the UK upper and middle market, with
strong prospects in a rapidly growing £3 trillion market.
OM Asset Management: an institutionally focussed, multi-boutique asset management business, delivering strong, diversified
growth in attractive asset classes through organic initiatives and acquisitions.
For the year ended 31 December 2016, Old Mutual reported an adjusted operating profit before tax of £1.7 billion and had
£395 billion of funds under management. For further information on Old Mutual plc and the underlying businesses, please visit
the corporate website at www.oldmutualplc.com
Sponsor:
Merrill Lynch South Africa (Pty) Ltd
Joint Sponsor:
Nedbank Corporate and Investment Banking
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