NDBKY Nedbank Group Ltd (PK)

LONDON—Old Mutual PLC has announced plans to separate its four main businesses—Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank and OM Asset Management—as it reported a 5% rise in 2015 net profit.

The banking and investment company expects to complete the separation by the end of 2018.

It also plans to reduce its 40% stake in Nedbank, a South African lender, by distributing its shares to Old Mutual holders. It doesn't plan to sell any of Nedbank to a new strategic investor.

Chief Executive Bruce Hemphill said the new strategy will allow each business to have simpler access to capital markets to fund its growth more easily and be valued more appropriately, with more straight forward regulatory arrangements.

"There is likely to be a range of external influences on future group reported earnings including slower economic growth, exchange rates and equity market volatility and how we execute the managed separation. We nevertheless believe that our four strong businesses are well placed to continue to perform strongly in their domestic markets", he said.

Shares in the banking and investment company rose earlier this week on speculation of a breakup.

For the year ended Dec. 31, 2015 Old Mutual made a net profit of £ 614 million ($876.49 million) compared with £ 582 million a year earlier. Funds under management at Dec. 31 stood at £ 327.9 billion.

The board plans to declare an unchanged second interim dividend of 6.25 pence a share, making a total payout for the year of 8.9 pence, up from 8.7 pence in 2014.

Old Mutual announced in November that it would conduct a review after it appointed Mr. Hemphill as CEO.

At the time of his appointment Mr. Hemphill, who joined the company from Standard Bank, said he planned to visit the individual businesses within the group and report his observations in the second quarter of 2016.

Share in Old Mutual jumped 11% in early trading in London Monday, before giving up some gains to trade 8.5% higher by midmorning.

Old Mutual, which was established in 1845, provides investment, savings, insurance and banking services to more than 17 million customers in Africa, the Americas, Asia and Europe. The company has been listed on the London and Johannesburg Stock Exchanges, among others, since 1999.

Its shares closed in London Thursday at 185.3 pence and are currently down 15% over the past 12 months.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

March 11, 2016 02:45 ET (07:45 GMT)

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