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Operator: Good day, ladies and gentlemen, and welcome to the Old Mutual Q3 Voluntary Update [Operator Instructions] Please note that this event is being recorded. I will now hand you over to the Head of Investor Relations, Langa. Please go ahead.
Langa Manqele: Thank you very much, and good afternoon to everyone who's joining us, and good morning to those who may be dialing in from the space. My name is Langa Manqele, as introduced. I head up Investor Relations. On the call with me is Jurie, our CEO. He will be leading the call, and Jurie will be assisted during the Q&A and comment session by Casparus, our CFO; as well as Ranen Thakurdin, who is presently our Chief Accounting Officer. I will now turn over the call over to Jurie. Thank you.
Johann Strydom: Thanks, Langa. Good afternoon, everybody, or good morning [indiscernible] good to be with you. I think I'm sure you have in front of you the operating update that we put out on the 18th of November. So maybe just by intro from my side, it's been -- I think we had our Capital Markets Day towards the end of October, where we put out the important metrics that we're measuring ourselves on and be reporting on going forward in our medium-term targets. We're not reporting on those metrics in this operating update. But as we put -- as we made clearly the update that from next year onwards, from sort of Q1 numbers onwards, we will be reporting on those. I think internally, since the Capital Markets Day and as we head towards the end of the year, the focus has moved, I think, about as we spoke around taking those targets and operationalizing them into the business planning process. We've managed to catch the planning cycle to be able to do that as well as the scorecarding process. So very much moving from sort of strategy into execution. And so that's the focus, internally, as we ahead towards end of the year. I think just a couple of comments on the operating update we put out. And I think you will have noticed that there's not major changes from the trends that we reported at the half year. So the Life APE sales continuing to, fall by 1% and gross flows flat. A decline in net planned client cash flow for, again the reasons that we reported half year, particularly in the low margin outflows and investments and single big outflow had an impact there. Gross written premiums on the noncovered side are at 5% on the P&C side. And loans and advances also 1% down impacted, there of course, there was a sale of underperforming loan book impact on that. So those are the metrics that we put out there. I think Langa, I'm happy to go to questions for the conversation.
Langa Manqele: Thank you very much, Jurie. Judith, kindly open up the call. I do not see yet the queues on the Q&A. Please confirm on your side if you do. But otherwise, if you could just remind the participants on how to put in their questions through.
Operator: [Operator Instructions] Our first question comes from Baron Nkomo of JPMorgan.
Baron Nkomo: Just 2 questions. Firstly, are you able to give some color on the evolution of your CSM since June 2025? And then secondly, can you comment on Old Mutual Insure's underwriting performance so far in H2 relative to the strong first half performance we saw.
Langa Manqele: Thanks. Thank you. Over to you.
Casper Troskie: So on the CSM, unfortunately, I'm not able to give you more color on the evolution of CSM since the half year. We'll obviously be able to give you full reconciliation at the year-end. I was trying to assure underwriting margin, we haven't seen any material impacts that still show positive margin, but we obviously reported a very high number at the half year. So I would expect that to normalize more to within our updated range or at the top end of our updated range.
Operator: The next question comes from Harry Botha of Bank of America Securities.
Harry Botha: Can you comment on the Life APE sales that you're seeing in Personal Finance, excluding guaranteed annuity sales? And you also noted strong growth in retail gross written premium in Old Mutual Insure, if I understood correctly. H1 was up 5%. So it sounds like growth has increased. Can you comment on what's driving that increase?
Casper Troskie: Well, your comments specific to -- I'll just deal with it. I guess if do you look at the Personal Finance sales, guaranteed annuities were down close to 40%. So it's the majority of the reduction -- overall reduction [ in 9% ] that you're seeing period-on-period. So that's what's driving that. We are seeing -- we saw a slight uptick in the recurring premium sales. So the biggest move there is guaranteed annuities [indiscernible] pulling the piece of [indiscernible] your second question?
Harry Botha: Just regarding the gross written premium in retail segment within Old Mutual Insure, it sounded like it was up more than 5% at June.
Casper Troskie: I'll just check on that and come back to you. We can go to the next questions.
Operator: Our next question comes from Bradley Moorcroft of Peregrine Capital [Operator Instructions] Our next question comes from Francois Du Toit of Anchor Stockbrokers.
Francois Du Toit: Can you hear me?
Johann Strydom: Yes. We can.
Francois Du Toit: Can you maybe comment on your solvency level, maybe just directionality in the quarter and maybe factoring in buybacks as well. I know you don't like telling us whether you're buying back or not and whether you like the price to buy back or not. But maybe if you can just give a sense of how much you executed in the last quarter on your buybacks? That's the first question. Obviously, that's the solvency level will be a function of that, I guess, as well. Your -- second question, your gross flows, I think, was quite a bit stronger at the half year in terms of percentage growth. Maybe just comment on the reasons for the slowdown. I think you've mentioned the annuity sales, but it seems like there's a further slowdown there since the half year. But nonetheless, the net flows improved from the half year to outflows, but it's not as big outflows level as we had at the half year. So maybe can you just comment on your persistency or client retention in the light of better net flows and whether you're seeing positive lapse experience variances or improved levels compared with the half year. Just a sense of what's behind the improved net flows and weaker gross flows.
Casper Troskie: Okay. Let me go to solvency levels first. So Francois, what we -- last I looked, we had done just over 10% of the buyback, and we are obliged to on a regular basis publish what we've done. So that's in the market. So if you just look out for those, you'll see that. And then in the quarter, in terms of solvency ratios, I would expect most insurers have seen a decline in their solvency ratios given the fact that the pre-strike equity shock increased in that quarter. I think it is increased by about 4%, 5%, which means your capital requirements for any equities that you are holding on -- whether they will have gone up. So -- and at an all-time high, I think that the 1% away from the top level of stress that there can be. So I would have expected and we correspondingly, we've seen a reduction in [indiscernible].
Ranen Thakurdin: Just to add to Casper's comments, the share buyback was fully allowed for in the -- as a reduction to funds in our interim numbers. So as we execute the buyback, it won't affect our solvency ratios.
Casper Troskie: Okay. On the second -- on gross flows, the second point actually you're right. So the -- the Old Mutual investments had a higher base in quarter 3, 2024. So this year, we are -- so comparing against the higher base that's impacted from the current year growth. And then as we said earlier, we had much lower fee from inflows to the points earlier we made. But we also had muted inflows in wealth, whereas wealth was a really strong performer last year. So we've seen muted inflows in wealth. Hopefully that helps. So overall, [indiscernible] savings were down 1% from a gross flow perspective, and that's the main reason in Old's Mutual investments down 18% from the prior year.
Unknown Executive: And just to confirm earlier question, the 5% gross written premium growth of Old Insurance the retail growth rate was quite similar to the total.
Operator: Next question comes from Marius Strydom of Austin Lawrence Gidon.
Marius Strydom: My question is about OM Bank. At the open day or the Capital Markets Day, you mentioned you had 145,000 clients and you were adding 5,000 a day. So could you please give us some indication of whether you've seen that kind of daily addition maintained since the Capital Markets Day or whether it slowed markedly or any other information you could provide us around your traction?
Casper Troskie: So Marius, I think on the weekend, I think to note that we were about 200,000 and that run rate is going at about 300 accounts a day.
Operator: Our next question comes from Bradley Moorcroft of Peregrine Capital.
Bradley Moorcroft: Can you hear me now?
Casper Troskie: Yes.We can.
Bradley Moorcroft: Sorry about the issue earlier. Also a question on Old Mutual Insure top line. I noticed that the growth has slowed from 9% at interims to 7%. I mean any further color you can give there in terms of the slowdown, persistency challenges, increased competition would be very helpful.
Langa Manqele: Over to you, Casparus.
Casper Troskie: I'm trying get a performance [indiscernible] .
Langa Manqele: I will come back to you with that detail. Judith, may I check are there still any questions? I can see anyone who is on the queue at the moment.
Operator: No, sir. At this point, there are no further questions in the question queue.
Langa Manqele: Okay. Thank you very much. I will hand back over to you, Jurie, just to -- I think there's one question that I see. Judith, please check, I think it's right.
Operator: Yes, correct [indiscernible] of HSBC.
Unknown Analyst: I just had a question probably not related to Q3, but are you planning to take any restructuring charges in relation to your cost program? And will any of that be allocated to full year '25?
Casper Troskie: Just to understand correctly. You asked whether we are going to be adding any further restructuring provisions. Is that the question?
Unknown Analyst: Correct.
Casper Troskie: To the extent that you have to meet quite a lot of conditions to have a restructuring provision. So if you've met all the conditions that are required at year-end for a restructure, i.e. you've identified people, you've made the announcements, then it can be accrued for the year-end. If you're not in that position, you have to incur the cost when you actually do that restructure. So there will be additional costs in the second half relating to headcount reduction, but those have largely been dealt with. So I'm not expecting a large provision outstanding at 31 December, i.e., a restructuring provision for future costs. We'll see the one-off costs coming through in the second half. I hope that helps.
Langa Manqele: Thanks, Casper. Could you please just do a final round and check if we have any questions left and let's take those.
Operator: [Operator Instructions] We have a follow-up question from Harry Botha of Bank of America Securities.
Harry Botha: Just a follow-up around the loan growth issue. I think you noted the sale that had an impact on growth. What is your outlook for growth? How quickly do you see loan growth in Old Mutual Finance improving?
Langa Manqele: Than you. Over to you Casper.
Ranen Thakurdin: Yes. So Harry, as we mentioned earlier, part of the reason that the loan balances are flat as we were exiting specific pieces of the book. We are expecting to see better growth rates coming out of our loan book as we still very responsibly improve our lending. So we are maintaining tight credit criteria, but we do expect that book to grow going forward.
Langa Manqele: Operator, kindly check if we have any outstanding questions.
Operator: Our next question comes from Jarred Houston of All Weather.
Jarred Houston: Just checking you can hear me?
Casper Troskie: Loud and clear [indiscernible].
Jarred Houston: Thanks for the update. Just a question on your investment result, your shareholder investment return. Obviously, in the first half saw a very strong number. Is it fair to assume just given what's happened with markets both locally and in the rest of Africa as well as bond yields, it's fair to assume current run rate is a continuation of that strong trend.
Casper Troskie: Yes. I think it's fair to assume. Investors should just recall that we do have collars around -- so we have a protected equity structure. So upside is limited, but we do try and roll those collars on a regular basis in tranches to manage the position over time. But, yes, you should still see strong investment performance coming through in line with the markets...
Langa Manqele: [indiscernible] it sounded like you're going to ask a follow-up?
Jarred Houston: Yes. Langa, just the comment earlier about the progress on the buyback. I just want to clarify did Casper say only 10% of the buyback has been completed. And then just a question mark on -- we've obviously seen quite a big step-up in market volume as a result of an index outflow. Is the group participating in the higher level of market volume? Or is it just slowly ticking away over time.
Langa Manqele: Casper, would like to comment?
Casper Troskie: Yes. So obviously, we would participate in the higher market volume, if that's consistently happening. We set -- we have to work within the limits. As an issuer, there are limits around -- so we can't move the market [indiscernible]. So we have to work within those limits. And then we have -- we're doing this buyback with this mandate with 1 or 2 of the large banks. So they have specific parameters to work with them. The 10% was a few weeks ago that might have gone up in the last week or 2.
Ranen Thakurdin: Just over ZAR 400 million at the moment.
Langa Manqele: Thank you, Casper and Ranen. Operator, I'm comfortable that we round up and maybe take 1 last question.
Operator: Final question comes from Marius Strydom of ALG.
Marius Strydom: Firstly, your South African Asset Management performance in the third quarter versus the first half. Considering higher AUMs at 30 June and continuing strong market performance, should we expect a decent acceleration in your earnings run rate since the half year? And then the second question, considering the lapse assumption changes that you made and the management actions that you've taken, have you seen some improvements in your lapse experience at MFC?
Johann Strydom: Marius, just to remember, very small part of that base is equity half. So really, you're looking at sort of a balanced mandate. The assets that you have, for example, like, we're seeing pressure on credit spreads. So the origination targets are quite there might but on the flows. And then the alternatives, you're looking at much longer valuation cycle. So I would expect the force to increase in the third quarter, but there are quite a few moving parts.
Ranen Thakurdin: So Marius, just remember that most of our IFRS 17 products on BFA, we get value in the equity market that goes to the CSM that, it doesn't drop through to earnings. So you will see that largely coming through in the CSM.
Marius Strydom: My question is really related to the asset management businesses. So those that are not -- don't form part of the CSM.
Langa Manqele: Thank you, Casper. And thank you, Ranen.
Marius Strydom: Sorry, Langa, there was 1 more question.
Johann Strydom: Sorry, Langa, there was a question from Marius, on MFC persistency. I mean we obviously are progressing with the management actions, but I think it's too early to call a material improvement yet.
Langa Manqele: Operator, I don't see any questions I'm comfortable to wrap up here and hand back to you, just to wrap up the call for us. Thank you.
Johann Strydom: Okay. Well, thanks for being with us, everybody. Yes, I think there were 1 or 2 questions which we're happy Langa to get back to the individual. But for the rest, thanks for the conversation. Yes, I suspect our next conversation will be in the new year.
Langa Manqele: Thank you very much.
Operator: Thank you. Ladies and gentlemen, that concludes today's event. Thank you for joining us, and you may now disconnect your lines.