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The Sanlam Group has today announced a solid operational update for the 10 months to 31 October 2015 despite the very challenging business and economic environment in the markets where the Group operates.
The Group achieved total new business volumes of R175 billion, up 17% on the first 10 months of the 2014 financial year. Excluding the large bulk annuity policy written by Sanlam Employee Benefits (SEB) in the third quarter of 2014, new business volumes increased by 24%.
Sanlam Personal Finance achieved a 22% increase in new business sales. The 2015 new business sales benefited from the biennial premium renewal of the ZCC scheme as well as a large new voluntary scheme awarded to Sanlam Sky. Demand for Glacier’s offshore and wrap product solutions remained strong, contributing to 28% growth in Glacier’s new business contribution.
Sanlam Emerging Markets grew overall new business by 42%. The Botswana operations more than doubled their new business contribution, supported by strong annuity and investment business volumes. The Namibian operations experienced lower inflows of the more volatile unit trust business, more than offsetting good growth in new life business. All of the other regions (Rest of Africa, Malaysia and India) achieved growth in excess of 20%, despite some headwinds experienced simultaneously in some key markets.
Sanlam Investments increased its new business volumes by 14%, with the South African Investment Management and Wealth Management businesses achieving particularly strong growth.
Value of New Business (VNB) on a consistent economic basis declined by 8% compared to the same period in 2014. Excluding the large policy written by SEB in 2014, VNB increased by 1%.
Overall net fund inflows of R11.5 billion were achieved, representing a satisfactory performance given the large outflows experienced in 2015 from the Public Investment Corporation (R11.2 billion) from
Sanlam Investment Management and the Botswana Public Officers Pension Fund (R17.3 billion) from Sanlam Emerging Markets and Sanlam Investments’ International business.
Net result from financial services increased by 8% on the first 10 months of 2014. Santam experienced a particularly favourable claims environment in the 10 months to 31 October 2015. Fund-based fee income was supported by a relatively higher level of assets under management. Sanlam Investments reported lower operating earnings due to a decline in performance fees and increased spend on outsourcing and capacity building projects. The headwinds faced by Sanlam Emerging Markets’ Zambian and Indian businesses in the first half of the 2015 financial year also reflect in the 10-month results.
Commenting on the results, Sanlam Group Chief Executive Officer, Mr Ian Kirk said despite the headwinds experienced, the Group was satisfied with the overall operational performance for the period under review.
“Given the economic climate in most of the markets in which we operate, we are satisfied with our operational performance in the first 10 months of the financial year. While we expect the current challenging conditions to persist for the remainder of the financial year, we are confident that the Group’s strategy is appropriate to deliver on our longer term growth targets.”
Last week the Group, together with Santam, announced the proposed joint acquisition of a 30% stake in Morocco-based Saham Finances for a purchase consideration of US$ 375 million. An update on the Group’s capital position will be provided in the 2015 annual results announcement in March 2016.
A conference call for analysts, investors and the media will take place at 16h00 (South African time) today. Investors and media who wish to participate in the conference call should dial the numbers indicated below.
A toll free dial-in facility will be available. We kindly advise callers to dial in 5 to 10 minutes before the conference call starts at 16h00.
Recorded playback will be available for three days after the conference call.
Access code for recorded playback: 41231