Wrap Text
Operational update for the nine month period ended 30 September 2021
Liberty Holdings Limited
Registration number 1968/002095/06
Incorporated in the Republic of South Africa
Share code: LBH
ISIN code: ZAE000127148
("Liberty Holdings" or "the Group")
LIBERTY HOLDINGS LIMITED
OPERATIONAL UPDATE FOR THE NINE MONTH PERIOD ENDED 30 SEPTEMBER 2021
SHAREHOLDER VOTE REFLECTS STRONG SUPPORT FOR ACQUISITION OF THE NON-
CONTROLLING INTERESTS IN LIBERTY BY STANDARD BANK
At the general meetings of ordinary and preference shareholders held on 13 October 2021, Liberty’s
non-controlling shareholders overwhelmingly approved the proposed transaction announced on
15 July 2021, whereby Standard Bank Group (SBG) is proposing to buy 100% of Liberty Holdings
Limited and to integrate Liberty more closely into the greater group. Should the relevant regulatory
authorities also approve the proposed transaction with SBG, we anticipate the finalisation of all
conditions precedent in the first quarter of 2022, which is in accordance with timelines provided in the
combined circular to Liberty shareholders issued on 13 September 2021. SBG and Liberty have
enjoyed a “special relationship” since 1974. The proposed transaction represents a natural progression
in this special relationship, increasing the integration and ability to collaborate to provide the best
financial service offerings to clients through the most efficient means.
The positive sales trends seen in the first half of 2021 continued into the third quarter. Group long-term
insurance indexed new business sales for the nine months to 30 September 2021 of R6 801 million
reflected a 30,9% increase over comparative period sales of R5 194 million. This increase is mainly due
to SA Retail indexed new business sales of R5 968 million having increased by 29,0%, underpinned
by good growth in recurring embedded banking, risk and investment product sales and continued
growth in single premium conventional annuity and Evolve investment plan sales. The mix of new
business sales and margin however remain a challenge, with a key focus maintained on managing the
recurring expense base in a disciplined manner with continued investment into the Group's strategic
initiatives. Liberty Corporate indexed new business of R567 million was 57,5% above the comparative
period, with good recurring and single premium growth impacting positively. Liberty Africa Insurance
indexed new business of R266 million was 27,9% above the comparative period, mainly attributable to
increased group life assurance, funeral and pension business in the Kenya and Botswana operations.
Mortality claims for the Group increased significantly during the third quarter due to the severity of the
third wave of the Covid-19 pandemic in South Africa and subsequent waves in the various African
territories in which the Group operates. The pandemic reserve set aside in 2020 and 2021 has been
utilised to absorb the relevant risk experiences across SA Retail, Liberty Corporate and Liberty Africa,
and specific qualifying pandemic related expenditure. The risk component of the pandemic reserve was
depleted by 30 September 2021. In addition, risk claims on short contract boundary business which
represents claims that were not covered through the pandemic reserve and not anticipated in the pricing
of these books of business have been incurred. Uncertainty related to the evolution and impact of the
pandemic and associated waves remains. Reassessment of the prospective pandemic reserve is
underway taking account of the possibility of further waves, progress with vaccination rollouts and other
developments relating to the pandemic.
The Group remains well capitalised. The Solvency Capital Requirement (SCR) cover ratio of Liberty
Group Limited, the Group’s main long-term insurance licence, on 30 September 2021 was 1,74 times
(31 December 2020: 1,81 times). The SCR cover ratio remains close to the mid-point of the Group's
target range, underpinning our ability to fulfil our promises to clients and other stakeholders.
Group total assets under management of R838 billion has grown by 8,0% since 31 December 2020,
largely due to favourable investment market performance and group net customer cash inflows.
Group net external third party cash inflows remained strong at R15,6 billion, primarily due to STANLIB’s
net external third party cash inflows of R17,0 billion which were slightly lower than last year.
Conclusion
We continue to work hard to fulfil our purpose in making our clients’ financial freedom possible,
particularly in the context of the prolonged Covid pandemic. Our capital base has allowed us to meet
the challenges that Covid brings, and we are well placed to meet the continuing strains of the pandemic.
We expect that we can maintain the sales growth that we have achieved this year. We remain confident
that our strategy will deliver an increasingly good client and adviser experience.
We expect that the existing strong alignment of Standard Bank and Liberty’s goals should allow for an
accelerated and seamless integration of the businesses.
This operational update for the nine month period ended 30 September 2021 has not been audited or
reviewed by the Group's auditors.
Queries:
Investor Relations
Sharon Steyn
Email: sharon.steyn@liberty.co.za
18 November 2021
Sponsor
Merrill Lynch South Africa (Pty) Limited t/a BofA Securities
Date: 18-11-2021 07:05:00
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