Old Mutual Holdings PLC has exited Kenya’s stock brokerage sector following the sale of its subsidiary, Old Mutual Securities.
The transaction—whose buyer and financial terms remain undisclosed—marks a strategic move in the group’s East African operations, reinforcing its focus on insurance, asset management, and retirement solutions.
Strategic Refocus and Portfolio Streamlining
The divestiture aligns with Old Mutual’s broader restructuring efforts, as outlined in its 2025 Half-Year Financial Results. The company stated:
“We continue to simplify our business and focus on areas where we have scale and competitive advantage.”
The report also highlighted improved capital efficiency, noting:
“Adjusted headline earnings increased by 12%, and return on net asset value improved to 14.7%, reflecting disciplined capital allocation.”
Analysts suggest the exit from brokerage services may help Old Mutual reduce regulatory overhead and reallocate resources toward higher-margin products. The move follows governance reforms and operational reviews within Old Mutual Holdings PLC, as documented in its investor disclosures.
Implications for Kenya’s Capital Markets
The departure of Old Mutual Securities may accelerate consolidation in Kenya’s brokerage landscape, where firms face margin compression and heightened competition. The exit opens opportunities for new entrants or existing players to acquire legacy infrastructure and client portfolios, potentially reshaping market dynamics.
Financial Performance: H1 2025
Despite strategic gains, Old Mutual’s interim results reflect significant earnings pressure. For the six months ended June 30, 2025, profit after tax from continuing operations fell by 99% year-on-year. Consolidated profit before tax dropped to KSh380 million, down from KSh1.1 billion in H1 2024.
Key contributors to the decline include:
- Interest Rate Impact: “Lower interest rates in Kenya reduced interest income and triggered fair value losses on fixed-income securities,” the group reported, “resulting in a KSh625 million impact on profitability.”
- Insurance Segment Weakness: Insurance service results fell by KSh57 million, driven by lower revenues and higher loss ratios in Kenya’s life insurance business.
- Equity and Loan Pressures: Reduced equity income and increased finance costs from refinancing Ugandan property loans further weighed on performance.
- Tax Burden: A higher effective tax rate compounded the earnings decline.
Operational Highlights
Despite the downturn, Old Mutual reported other comprehensive income of KSh94 million, largely from currency translation gains as the Kenyan shilling weakened against the Ugandan shilling. The group also maintained flat operating expenses and posted a 31% year-on-year increase in asset management income, rising from KSh0.7 billion to KSh1.0 billion.
“Our asset management business continues to deliver strong growth, supported by increased client mandates and improved market performance,” the company noted.
Legal and Governance Context
The sale comes amid ongoing legal proceedings involving Old Mutual Holdings, including an insolvency petition filed by a minority shareholder. In its February 2025 ruling, the High Court stated:
“The petition raises serious questions about governance and shareholder rights, but the balance of convenience favours a stay pending appeal.”
The Court of Appeal has since granted a stay on the petition, allowing Old Mutual to proceed with its restructuring plans.
