OLD Mutual Zimbabwe (OMZ), is set to merge its eight subsidiaries into three main units, as it moves to synchronise its operations with parent company, Old Mutual plc.
The realignment is part of the conglomerate’s push to cut costs and create space for greater financial probity.
OMZ chief executive, Isiah Mashinga told shareholders recently that the merger will result in Old Mutual Property Zimbabwe (Pvt) Ltd and Old Mutual Real Estate Zimbabwe (Pvt) Ltd being merged with Old Mutual Zimbabwe Investment limited into Old Mutual Investment Group Zimbabwe.
The banking units, CABS and CABS Custodial Service (Pvt) Ltd will be merged.
Shade Services Private Ltd, which is owned by Old Mutual Zimbabwe will surrender operations into the other retained units and its employees will be inter-grated into the retained units.
The group’s shareholders have since voted unanimously in favour of the restructuring.
“The restructuring exercise is expected to result in a huge costs reduction, a simplified operating structure, and improved operating efficiencies,” Mashinga said.
Meanwhile, the group says it has performed according to expectations in the first quarter of 2019.
“Performance across all our operations has remained resilient and actually normalising from the impact of the transition to the new currency regime.
“Profits have also remained in line with expectations while expense growth was managed to levels below the year on year inflation numbers released for the first quarter of the year,” said Mashinga.
Profit before tax increased by 36%, from US$242.9 million in 2017 to US$330 million in 2018. this was mainly driven by growth in total revenue which rose 41% from US$991 million to US$1.4 billion on the back of growth in all main revenue lines in the 2018 financial year.
OMZ also saw its operating profit increase by 23% from US$65 million to US$79 million, driven by profit growth in the life, banking and asset management businesses indicating resilience of the core business operations.