Old Mutual Zimbabwe delivered a significant accounting blow to its parent group in 2025, with the Zimbabwe operation responsible for a R1.496 billion drag on the group's headline earnings which was the largest single negative item in Old Mutual Limited's full-year income statement for the year ended 31 December 2025.

The impact stems from Zimbabwe's transition of its functional currency from the Zimbabwe Gold to the US dollar, which was completed in 2024. When a company changes the currency it uses to account for its operations, profits previously recognised in the old currency do not repeat in the new currency at the same level.

The inflation-related accounting gains that had been embedded in Zimbabwe's local-currency profits under hyperinflation accounting effectively vanished when the books were restated in USD terms. This is a one-time accounting cost and Old Mutual has confirmed it does not expect a similar Zimbabwe drag in 2026.

The consequence at group level was a 2% decline in headline earnings to R8.6 billion, even as the group's adjusted headline earnings, which exclude Zimbabwe, grew 24% to R8.3 billion. That gap between 24% growth and a 2% decline is entirely Zimbabwe.

Old Mutual Zimbabwe is listed on the Zimbabwe Stock Exchange under the ticker OMU, with the ZSE listing sponsored by Imara Capital Zimbabwe. The business operates across life insurance, short-term insurance, and asset management in Zimbabwe, serving a substantial customer base through a network of tied advisers and branches.

Despite the accounting turbulence at group level, the underlying Zimbabwe business continues to write new life insurance and savings products, collect premiums, and manage investment portfolios on behalf of local policyholders and clients.

Old Mutual excludes Zimbabwe from the key performance indicators it uses to manage the group, citing barriers to accessing capital through dividends. This means that the group's reported return on net asset value of 15.2%, its results from operations growth of 13%, and its value of new business margin of 1.2% are all calculated without Zimbabwe.

The parent group in Johannesburg cannot reliably repatriate Zimbabwe's earnings at commercial foreign currency rates, which is the formal reason for the exclusion.

In the Southern Africa cluster, which groups Zimbabwe alongside Namibia, Botswana, Malawi, and Eswatini, life APE sales grew 8% to R988 million in FY2025.

Short-term insurance gross written premiums from the cluster were R1.224 billion, broadly flat from prior years. The Africa Regions cluster's net underwriting margin was 1.9%, with corrective underwriting actions described as ongoing.

The value of new business margin for Africa Regions was negative 3.3%, meaning new policies written across the African regional markets are currently reducing embedded value rather than adding to it at current pricing and persistency assumptions.

At group level, Old Mutual delivered a strong operational year outside of the Zimbabwe accounting impact. Results from operations grew 13% to R9.8 billion. The return on net asset value reached 15.2%, entering the group's 15% to 17% target range for the first time.

The board declared a total dividend of 93 cents per share, 8% higher than the prior year's 86 cents, comprising an interim dividend of 37 cents and a final dividend of 56 cents. The final dividend is payable on 13 April 2026.

ZSE shareholders should note the record date for the ZSE register is 10 April 2026. The dividend is subject to 20% withholding tax, resulting in a net payment of 44.8 cents per share for shareholders not exempt from withholding tax.

The group's discretionary capital balance almost doubled to R6.1 billion. A R3 billion share buyback announced in September 2025 is continuing, with R700 million completed by December 2025. The group solvency ratio was 162%, within the 155% to 185% target range.

Old Mutual launched OM Bank during 2025, a retail banking operation targeting the mass market in South Africa. By December 2025, OM Bank had 284,000 customers and R272 million in deposits. The bank targets profitability by 2028. This banking initiative is South Africa-focused and there are no current announcements regarding a Zimbabwe extension.

The group's value of new business declined 52% to R850 million, and the VNB margin fell from 2.5% to 1.2%, below the 2% to 3% target range.

This was driven primarily by the group strengthening its persistency assumptions essentially, Old Mutual now expects more policyholders to cancel life insurance policies earlier than previously modelled.

This change reduced embedded value by R10.9 billion and is the main reason Group Equity Value per share rose only modestly, by 2%. 

The underlying Zimbabwe business is maintaining its new business volumes and customer relationships. However, the parent group continues to exclude Zimbabwe from its performance metrics and places the country in an "evaluate and pivot" strategic classification rather than the "deepen market leadership" tier reserved for Namibia, Botswana, Malawi, and Eswatini.

Whether Zimbabwe moves into the latter category depends on developments in Zimbabwe's policy environment around the repatriation of investment income by foreign-affiliated companies.

Old Mutual Group Chief Executive Jurie Strydom described 2025 as a year of strategic reset and focused execution, with the group now shifting emphasis to delivering on the revised priorities.

The group expects the 2026 global environment to remain uncertain but views the South African outlook as more constructive following the 2026 national budget's reaffirmation of fiscal discipline.