Old Mutual H1 Returns Top Cost of Capital as OM Bank Scales

Old Mutual reported its interim results for the first half of 2026 on September 8, 2026, marking the first time the South African financial services group's core return metrics exceeded its cost of capital. The milestone was supported by scaling operations at OM Bank and underlying performance across core divisions, even as broader earnings contracted.

"We are becoming famous for doing what we say we are going to do," said Jurie Strydom, Group CEO, in a statement regarding the release.

Key Return Metrics and Cost of Capital

The company's return on group equity value (RoGEV) reached 12.7% for the period, climbing 860 basis points from the 4.1% reported in full-year 2025. This performance pushed the return above Old Mutual's estimated 12.5% cost of capital for the first time.

Concurrently, the normalized return on net asset value (RoNAV) achieved 12.6%, representing a 70 basis point increase over prior figures and clearing the company's cost-of-capital threshold. However, this operational profitability contrasted with adjusted headline earnings, which declined 27% year-over-year due to lower-than-expected shareholder investment returns, according to an Investing.com report.

Capital Return and Shareholder Payouts

Despite the contraction in adjusted headline earnings, Old Mutual's board approved an interim dividend of 40 cents per share, marking an 8% increase compared to previous payouts. Management also initiated a R1 billion share buyback program to return excess capital to shareholders.

OM Bank Growth and Near-Term Losses

A primary driver of the group's strategic evolution is OM Bank, which continued scaling its user base and retail deposit volumes through the first half of the year. Customer numbers for the digital-first institution reached approximately 742,000 by June 30, 2026, and subsequently surpassed 1 million by the end of September.

Retail deposits expanded alongside customer acquisition, rising to R1.4 billion by mid-year and further increasing to R1.6 billion by August 31, 2026. As the bank scales its operations and expands its lending and transactional infrastructure, it recorded a net loss of R611 million for H1 2026, reflecting typical early-stage investment outlays for a newly established banking entity.

What Is at Stake for South African Financials

The results highlight the ongoing transformation of traditional insurers into diversified financial conglomerates in South Africa. By successfully clearing its cost of capital and scaling a greenfield retail bank past the one-million-customer milestone, Old Mutual is attempting to demonstrate long-term value creation despite volatile investment returns and upfront capital expenditures in its banking division.