8 September 2011
The Sanlam Group this morning reported a solid set of results for the six months ended 30 June 2011.
The highlights were as follows:
Sanlam has attributed its performance for the six months to a consistent strategy which the company says has over the last three years provided a sound base from which to perform in a challenging business environment.
The Group’s strategy focuses on five pillars:
Sanlam's Group Chief Executive, Dr Johan van Zyl, said one of the major initiatives in 2011 has been to pursue profitable growth opportunities with the aim of efficiently utilising discretionary capital.
To this end, Sanlam had reached an agreement with the Shriram Group, its partners in India, to increase Sanlam’s exposure to the financial services activities of the Shriram Group. These are held through Shriram Capital and include commercial financing, retail financing, a distributor of wealth products and stock broking businesses, as well as a majority holding in each of the life and general insurance joint ventures with Sanlam.
Said Dr Van Zyl: “A Sanlam investment in Shriram Capital better aligns the Group’s interest with that of our Indian partner and provides Sanlam with access to the strong growth and profit generating capacity of the financing entities. This investment is in line with our strategy to diversify both geographically and into broader financial services. We are pleased to build on our already strong relationship with Shriram, which has developed through our involvement with the two insurance entities over the past five years.” This transaction is still subject to regulatory and SA Reserve Bank approval.
Dr Van Zyl also reaffirmed that Sanlam was investigating a number of opportunities for expansion in Africa and that the potential for expansion into South East Asia would also be considered. This includes potential consolidation in some markets as well as expansion into new countries, with Mozambique likely to be added in 2011. Developments and further information will be provided when appropriate.
Looking ahead, Dr van Zyl said operating conditions for the rest of 2011 were expected to remain difficult.
“The economies of developed markets are likely to remain weak with downside risk increasing significantly since the end of June. This elevates the risk of a slowdown in demand for commodities, which will impact on growth in the resource-based economies in which the Group operates. Volatility in investment markets is commensurately also expected to remain. The outlook for the remainder of the 2011 financial year therefore remains cautious,” he concluded.