Saturday, August 25, 2018

Liberty says management actions showing signs of progress

Liberty Holdings says that management actions are showing signs
of progress as the group reported results for the six months
ended June 2018, on Thursday.
The financial services company reported a 5% rise in normalised
headline earnings  of R1.33 billion, from R1.26 billion
previously, with normalised operating earnings up 18% to R958
million (30 June 2017: R814 million).
“The normalised operating earnings were supported by increased
earnings from the South African insurance operations and the
STANLIB businesses,” Liberty said.
Normalised return on equity was 12.1%, from 11.7% in 2017.
Group long-term insurance net customer cash inflows amounted to
R262 million in contrast to prior period outflows of R665
million, supported by lower policy withdrawals and maturities
in Individual Arrangements and lower scheme terminations in
Liberty Corporate.
“STANLIB South Africa continues to produce good fixed interest
franchise investment returns and has made progress on improving
investment performance within the multi-asset and equity
franchises, with increased third party net customer cash
inflows into non-money market portfolios,” it said.
STANLIB South Africa net customer cash inflows increased to
R8.4 billion from R5.6 billion in the prior period. However, it
experienced outflows of R7 billion, mainly related to the
termination of one large institutional mandate.
Long-term insurance indexed new business of R3.77 billion is 4%
below the prior period. “The tough economic environment has
continued to place significant pressure on retail single and
recurring premium investment and risk sales volumes, Liberty
said.
Total group assets under management amounted to R719 billion
(31 December 2017: R720 billion).
Liberty said that its capital position remained strong during
the period with the capital adequacy ratio of the group’s main
long-term insurance licence, Liberty Group Limited at 2,67
times the regulatory minimum at 30 June 2018 (31 December 2017:
2,92).
Group equity value per share was lower at R138,66 (31 December
2017: R140,31). The lower group equity value per share was
attributable to lower investment returns, economic assumption
changes due to the higher interest rate environment and the
2017 final dividend paid in April 2018.
As part of Liberty’s strategy refresh, a revised organisational
design was announced internally in mid-July with implementation
commencing in the second half of the year. “The key element of
the group’s new way of working is to place the customers and
financial advisers at the heart of everything we do, with a
strong focus on the South African insurance and asset
management businesses.”
Liberty said that collaboration with the Standard Bank Group
continues to provide opportunities to grow new business and
provide joint product offerings as evidenced in our
bancassurance results.

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