Old Mutual plans £1bn takeover

OLD MUTUAL, South Africa's biggest insurer, is sticking by plans to spend £1bn on a major UK acquisition despite missing out on the recent sale of Royal & SunAlliance's life business.

Finance director Julian Roberts added that recent moves by the Financial Services Authority to shore up firms' balance sheets meant the environment was much better for potential bidders.

He said: 'We are still looking to balance the mix of business we have. We are happy with growth from South Africa and the US and we are not giving up on the UK.'

Old Mutual was linked with RSA's closed life fund, sold to Resolution Life Group for £850m recently, but Roberts said the outsourcing undertaken by RSA meant many potential synergies had gone.

Underlying first-half operating profits across Old Mutual rose 7% to £422m, at the top end of analysts' expectations, on strong growth in US asset management and South African general insurance.

The London-listed business registered a record net client inflow of $5.3bn in its US asset management arm in the first half, beating the target it set for the year as a whole.

Funds under management at the group's UK fund supermarket Selestia rose to £477m. A negative investment return of £287m meant the group posted a bottom-line pre-tax loss of £10m.