• Old Mutual has 12% upside to our intrinsic value at the time of this report. We believe a continuation in an improving consumer from lower interest rates combined with management efforts to improve profitability through margin-accretive sales (mix), interventions to improve persistency and expense and capital management should serve as potential catalysts to unlock this upside.
• We expected the near-term loss run rate of the bank to be a headwind in an already very competitive environment in both the insurance and banking sectors.

Headline earnings increased by 20% to R8.8 billion, driven by higher results from operations, stronger shareholder investment returns, and a non-repeat of prior year once-off losses relating to IFRS 17 accounting transition. Our research supports a buy recommendation.