Old Mutual reports solid rise in net client cash flows

Banking group Old Mutual reported an 80% rise in net client cash flows in its first quarter on Thursday, to £1.8bn, citing its vertically-integrated strategy of owning distribution, an investment platform, discretionary fund management and asset management.

The FTSE 100 group said gross sales increased by 17% during the period, to £5.4bn, primarily driven by strong sales into the investment division and the UK platform.

Funds under management increased by 3% since the start of the year to £107.1bn, which the company put down to the strong net client cash flow growth. UK Platinum funds under management was up to £35.4bn, from £34.5bn at the start of the period, with gross flows of £1.6bn and net flows of £0.7bn.

Old Mutual Global Investors’ funds under management increased by 5% to £26bn, and Quilter Cheviot’s funds under management increased to £18bn.

"We have achieved strong net client cash flows notwithstanding the volatile market conditions,” said Old Mutual Wealth CEO Paul Feeney.

“We have also seen strong pensions sales in Q1 2016 as we continue to benefit from the introduction of pension freedoms in the UK last year."

In a separate announcement, Old Mutual’s South African banking subsidiary Nedbank made its last quarterly update, having previously indicated it would end the three-monthly reports in line with decisions made at Old Mutual.

"Nedbank Group's own operations in South Africa and in the Southern Africa Development Community produced a solid performance in line with management's expectations for the first three months of the year,” said Nedbank Group CEO Mike Brown.

Brown said net interest income for the period grew at low double-digit levels, supported by continued growth in average interest-earning banking assets. The net interest margin for the period widened slightly from 2015’s level of 3.3%, he added.

Nedbank’s credit loss ratio increased as expected from the full year 2015 level, but remained within the firm’s through-the-cycle target range of 60-100 basis points.

Non-interest revenue in the period grew at mid-single digit levels, Brown said, with expenses growing in line with management expectations and continuing to be well-managed.