Old Mutual Dividends up 8% as Profits Surge

Old Mutual has increased its dividend payout after reporting stronger earnings despite mixed performance across its businesses.

For the year ending December 2025, the group posted a 13 per cent increase in operating earnings to about KSh 764 billion, while total dividends rose 8 per cent to approximately KSh 7.25 per share, supported by improved cash generation and stronger core operations.

The higher payout reflects the group’s focus on delivering shareholder returns while repositioning its business for expansion, particularly in banking and asset management.

Chief executive Jurie Strydom said the company has reset its strategic priorities to unlock value and drive growth, with equity value per share also improving during the year.

The dividend increase was underpinned by stronger cash flows, particularly from asset management and general insurance, as well as disciplined capital allocation.

Old Mutual also continued executing its share buyback programme, returning additional capital to shareholders while maintaining investment in key growth areas.

A central part of the group’s strategy is its newly launched OM Bank, which is already showing early traction. Customer and retail deposit growth is tracking ahead of expectations, even before full-scale marketing campaigns are rolled out.

About 46 per cent of customers are being onboarded through branch networks, indicating strong initial uptake. The bank, launched in September 2025, is expected to become profitable by 2028 and is positioned as a key driver of future earnings.

Performance across business segments was mixed. The life business recorded modest sales growth but faced pressure on margins due to lower annuity sales. In contrast, the general insurance unit delivered stronger results, with improved underwriting margins and premium growth.

Asset management was a standout performer, with higher inflows and growth in savings and wealth platforms supporting overall earnings.

In East Africa, however, dividend momentum remains constrained. Old Mutual Holdings Kenya reported a 2 per cent increase in net profit to KSh 856 million but did not declare a dividend for the second consecutive year.

The Kenyan unit saw strong growth in fee and commission income, driven by asset management, but this was offset by a loss in the insurance segment and rising operating costs.

Non-insurance revenue increased significantly, reflecting a shift toward less capital-intensive income streams, while the group also exited certain markets and restructured parts of its operations.

Operating costs across the group rose during the year, partly due to restructuring expenses aimed at reducing future expenditure. Old Mutual reported progress on its cost-saving programme, with early gains already achieved.

Looking ahead, the group expects a challenging global environment but sees improving conditions in its core markets, supported by better fiscal discipline and rising investor confidence.

The dividend increase signals management’s confidence in the group’s earnings resilience, even as it navigates uneven performance across regions and business lines.

Read Also: StanChart maintains high dividend payout at Ksh 31, Despite 38% Profit Drop – Business News