Old Mutual Wants to Be More Than an Insurer — and the Returns Are Finally Cooperating
A 1-million-customer bank milestone, a returns inflection above cost of capital, and a nasty accounting headline that masks a structurally stronger group.
OMU.JO · Earnings Call · 2026-09-08
The insurer that decided to be a bank
For two quarters running, the single highest-momentum keyword in Old Mutual's own trajectory has been OM Bank — and Tuesday's interim print gave that theme its first genuinely symbolic marker. Group CEO Jurie Strydom told investors the group is days away from a threshold most South African challenger banks never reach: “We will cross the 1 million-customer threshold in the next couple of weeks.” — Jurie Strydom, Group CEO · 2026-09-08 Retail deposits ran from ZAR 1.4bn at end-June to ZAR 1.6bn at end-August, and 357 branches are now wired into the bank.
But the strategically interesting line was not the customer count — it was the change of framing. Twelve months ago the language was defensive: earn the right to compete. Now: “we are, in fact, shifting our thinking already from establishing the right to win to actually really contesting the banking profit pool.” — Jurie Strydom, Group CEO · 2026-09-08 Management repackaged the target as a cluster RFO outcome — ZAR 0 to ZAR 200m of banking-cluster results from operations by 2028 — anchored on 2.5–2.8m customers, ZAR 8–10bn of retail deposits, and a lending book scaled from ZAR 16.4bn toward ZAR 26bn.
The bank sits inside a broader franchise whose own keyword, proof points, has become something of a management mantra. Strydom's framing — "a company that is famous for doing what we say we are going to do" — is the kind of line that only works if the numbers keep landing, and this half they largely did.
The returns finally clear the hurdle
For the first time, both of Old Mutual's headline return metrics cleared the group's roughly 12.5% cost of capital. ROGEV jumped to 12.7% from 4.1% at December, and normalized RoNAV hit 12.6%. That is the load-bearing fact of this release: the medium-term targets (14–16% ROGEV, 15–17% RONAV) still sit ahead of the group, but the direction of travel is now unambiguous.
Underpinning it: Life APE sales up 21%, gross flows up 21%, and results from operations per share up 11% — squarely inside the 10–14% sustainable growth band Strydom guided to off a 2025 base. The VNB margin ticked up to 1.4%, still far from the 2–3% ambition, held back by the industry-wide collapse in guaranteed annuity sales — a theme Strydom flagged a year ago when he noted “pressure on the guaranteed annuity sales in South Africa, which I think you've seen has created pressure across the market.” — Johann Strydom · 2025-09-10
The noise underneath the headline
Here is the contrast that matters. Adjusted headline earnings per share fell 27%. On a skim, that looks like a broken print. It isn't. The drag came from shareholder investment returns running below the group's normalized assumption, driven by an active bond-duration extension taken deliberately to manage solvency sensitivity. CFO-designate Ranen Thakurdin was blunt about the transience: “it has actually come back a little bit since then, and so that loss is partially reversed.” — Ranen Thakurdin, CFO Designate · 2026-09-08
That is the shape of a group whose statutory earnings are increasingly a function of a managed asset-liability book rather than underlying operations — and the underlying operations looked healthy. Old Mutual Investments' RFO rose 40% on a 48% gross-flow surge, with the alternatives business — genuinely lumpy, management conceded — posting a 97% capital raise to ZAR 6.7bn. Africa Regions RFO rose 65%.
The one real blemish was Old Mutual Insure, where underwriting margin held at a resilient 7.6% despite ZAR 376m of catastrophe losses from Western and Eastern Cape flooding — a roughly 3-point margin hit absorbed, as one executive put it, by a book that is “better in H1 2026 than in H1 2025” — Soul Abraham, Unknown · 2026-09-08 on an attritional basis.
A cost and capital machine quietly doing the work
Dig past the returns and you find the operational spine that Strydom has been building since his Capital Markets Day. Cumulative cost savings reached ZAR 936m, on track for ZAR 1bn this year and ZAR 2.5bn next; Thakurdin noted the next tranche splits roughly 50/50 between covered and non-covered businesses, with the non-covered savings dropping straight into profit. Discretionary capital sits at ZAR 3.1bn after completing a ZAR 2.3bn buyback, with a fresh ZAR 1bn repurchase announced and at least half of the ZAR 4bn OMLACSA interim dividend expected to flow up in H2.
Capital efficiency got a structural boost too: the group trimmed its OML solvency range to 150–180% and OMLACSA to 150–180%, freeing capital without touching the balance sheet. And there was a governance signal — a clean internal CFO succession, with Ranen Thakurdin moving from Chief Risk Officer to CFO Designate from 1 January. Internal succession at the top of a financial conglomerate is rarely a small thing; it telegraphs continuity of the strategy rather than a reset.
What this is not about
Worth noting what is absent. The broader market's keyword board is dominated by AI data centers, tariff refunds, and rate-cycle volatility — and Old Mutual is essentially unexposed to all of it. This is a domestic South African capital-allocation story: an insurer using its distribution footprint to attack a banking profit pool, tightening its expense base, and managing its solvency profile. The Zimbabwe ring-fencing, kept out of group KPIs since 2019, remains the one frozen asset with a potential thaw ahead of the 2026 annual results.
So the takeaway is not that Old Mutual has become a bank. It is that a ~ZAR 53bn market-cap insurer has, for the first time in years, a credible route to clearing its own cost of equity — and a management team willing to be measured, half by half, against growing confidence rather than promises.