Slide 1: Capital Management
Capital Management
Slide 2: Our Capital Journey
• Linking strategy to value Rectify • Financial management framework • Three manager model Our Capital Simplify • Three manager model impact • Capital and liquidity optimisation Journey • Capital releases • Debt to equity target Amplify • Capital ratio targets • Capital allocation
Slide 3: Rectify
Rectify Rectify Simplify Amplify
Slide 4: The What, The Outcomes
The Outcomes The What Delivering shareholder value Value drivers Maximising after Revenue Operating tax returns Growth Margin Long term sustainable return on net asset value Capital Competitive Execution Efficiencies Strengths & Delivery
Slide 5: Maintaining confidence
Maintaining confidence Upper Financial bound management framework Optimal Range Lower bound Impact of Perfect Storm Regulatory Minimum + Buffer Regulatory/Internal Minimum 100% (Risk Capacity) Rectify Simplify Amplify
Slide 6: Three Manager Model
Three Manager Model Centralises financial risk- and funding management Liability Asset Middle Managers Managers Manager Rectify Simplify Amplify
Slide 7: Simplify
Simplify Rectify Simplify Amplify
Slide 8: Drive Shareholder Value: Three Manager Model
Drive Shareholder Value: Three Manager Model Successful ~R3.3bn ALM navigation of 2020 related reserve market impact of releases Covid Rectify Simplify Amplify
Slide 9: Drive Shareholder Value: Three Manager Model
Drive Shareholder Value: Three Manager Model Future fit ability to Effective hedging manage IFRS17 with reduced costs changes Rectify Simplify Amplify
Slide 10: How we delivered
How we delivered Capital Structure R4bn debt We optimised the Clean up R8bn plc balance sheet to drive of non- R4bn Latam improved returns to core assets R1.5bn restructuring shareholders. Aligned Iterative risk margin, regulatory >20% uplift treatment to risk R2.6bn participations Rectify Simplify
Slide 11: How we delivered
How we delivered Special Nedbank distributions Ordinary Special dividend unbundling distributions R4.9 bn R38.8 bn Share buybacks R12.8bn R4.9 bn Rectify Simplify Amplify
Slide 12: How we delivered
How we delivered Special Nedbank distributions Ordinary Special dividend We have returned R61bn of capital unbundling distributions R4.9 bnlisting in 2018 R38.8 bn to shareholders since Share buybacks R12.8bn R4.9 bn Rectify Simplify Amplify
Slide 13: Amplify
Amplify Rectify Simplify Amplify
Slide 14: Drive shareholder value: Optimising capital structure
Drive shareholder value: Optimising capital structure Old Mutual Debt Maturity Profile (Rm) Existing issuances 3773 Planned issuances 2000 2000 2000 1477 Financial Leverage Ratio of 11.8% in 2020 2021 2022 2023 2024 2025 2026 2027 Regular debt issuances to create a smooth maturity profile Optimal Fi
Slide 15: Looking forward: Optimal ranges for resilience
Looking forward: Optimal ranges for resilience OMLACSA: 175% - 210% H1 2018 FY 2020 (unchanged) OML Group OML: Solvency ratio 164% 190% 165% - 195% Target 155% - 175% 165% - 195% OML: OMLACSA 170% - 200% (with Accounting Solvency ratio 227% 215% Consolidation) Target >200% 175% - 210% Rectify Simpli
Slide 16: Improved capital allocation
Improved capital allocation Existing Capital Allocated RFO Contribution PF&W 20% – 25% 15% – 20% MFC 25% – 30% 30% - 35% Diversification Cash CS 5% – 10% 15% - 20% generation: reduces Invest 5% – 10% required 15% - 20% 70% - 80% capital OMI 5% – 10% 0 – 5% RoA 10% – 15% 5% - 10% Rectify Simplify Amp
Slide 17: Improved capital allocation
Improved capital allocation New Capital Allocation competitiveness and growth Capital will be deployed to: • Core business All initiatives • Transactional and lending capabilities need to generate • Broker roll up in life and short term returns in excess of the • Simplifying the business cost of Equ
Slide 18: Focus on driving value
Optimised balance Disciplined Focus on capital sheet and driving value allocation capital structures
Slide 19: Impact of R10.4bn Nedbank unbundling
*Based on 23 June 2021 Impact of R10.4bn* closing price R168 per share Nedbank unbundling Discussions to expand strategic relationship were not practical given competition and client ownership hurdles • Proforma impact on the OML solvency ratio – negative 3%; remains in upper end of range Capital po