Interim Results - Part 1

Old Mutual PLC
4 September 2001


PART 1



                                OLD MUTUAL plc

              Results for the six months ended 30 June 2001



                                  HIGHLIGHTS

-       Operating profit* of £455 million (2000: £457 million), a 10% increase
        in Rand terms to R5,195 million (2000: R4,721 million)


-       Operating earnings per share* of 7.8p (2000: 9.0p) decreased 13%, a 3%
        decrease in Rand terms to 89.3c (2000: 92.4c)



-       Underlying life assurance operating profit before long term investment
        return of £145 million (2000: £135 million) increased 7%, a 19% increase
        in Rand terms to R1,656 million (2000: R1,395 million)



-       Banking operating profit of £168 million (2000: £156 million)
        increased 8%, a 19% increase in Rand terms to R1,918 million (2000:     
        R1,610 million)



-       Positive net fund inflows from major US asset managers, with retained
        Group funds under management increasing 2% over the period



-       Embedded value of £5.7 billion (31 December 2000: £5.6 billion)
        increased 3%, the same increase in Rand terms to R64.7 billion (31      
        December 2000: R62.8 billion)



-       Interim dividend of 1.7p (2000: 1.6p), an increase of 6%



*Operating profit and operating earnings per share are stated before goodwill
amortisation and exceptional items and have been calculated using a long term
rate of return.





Mike Levett, Chairman and Chief Executive, comments:





'These results are positive against a background of declining international
equity markets and a further fall in the value of the Rand.  Our focus
continues to be on delivering value from our recently acquired international
businesses, and our core South African operations, to build a strong base for
future growth.'





4 September 2001



Media and Analyst Enquiries:-


Old Mutual plc                                      Tel:  [phone]
Julian Roberts, Finance Director
James Poole, Investor Relations


College Hill (UK)                                   Tel:  [phone]
Gareth David
Tony Friend


College Hill (South Africa)                         Tel:  + 27 11 447 3030
Nicholas Williams
Linda Baker










CHIEF EXECUTIVE'S STATEMENT



In the first six months, our South African businesses have all performed well
with substantial increases in Rand profitability and the Group continued to
build upon its international presence in key financial markets.  In April we
announced that we had reached an agreement to acquire Fidelity & Guaranty Life
in the United States, and in May we launched our Americom US life venture.
These acquisitions, together with last year's acquisition of United Asset
Management, create an exciting capability to distribute savings and investment
products in the US.



Our results for the first half have been impacted by the depreciation of the
Rand against Sterling and declines in world equity markets.  The average Rand/
Sterling exchange rate in the period was 11% lower than the equivalent period
last year, thereby reducing operating profit for the six months ended 30 June
2001 by approximately £43 million.  World-wide equity market conditions in the
first half-year were challenging, as evidenced by an 11% fall in the MSCI
World Index, although the JSE increased 11%.



In the first half the Group's smoothed operating profit of £455 million is on
par with the £457 million of the prior year, and well ahead of the £283
million of 1999.  Operating earnings per share of 7.8p was 13% below the 9.0p
last year.  Embedded value of £5.7 billion at 30 June 2001 increased 3% from £
5.6 billion at December 2000, representing £1.60 per share, an increase of 3%
from £1.56.



Significant progress has been made in the reorganisation of our asset
management businesses.  The positive benefit resulting from our strategic
review of United Asset Management last year, is evidenced by the strong
turnaround this year in net fund inflows at Pilgrim Baxter and the Old Mutual
Asset Managers (US) companies.  The integration of the Gerrard back office is
also proceeding according to plan.



The result from our underlying life operations of £145 million, before long
term investment return, is 7% higher than the £135 million last year (a 19%
increase in Rand terms).  This is a good performance, which reflects positive
investment returns in South Africa.  Long term investment return of £82
million is 28% lower than the £114 million last year reflecting the
redeployment of capital to purchase UAM.  The value of new business on an
embedded value basis increased 4% to £27 million from £26 million last year, a
14% increase in Rand terms.  Sales in the first quarter were disappointing,
but have improved during the year.  We spent some £9 million on building our
new businesses in the US (Americom) and the UK (due to start later in the
year).



The Group's financial services businesses produced an operating profit of £90
million, an increase of 150% when compared to the £36 million in the prior
year, principally as a result of a £64 million contribution from our US asset
management businesses, which we acquired in September 2000.  Funds under
management at the end of the period were £166 billion, a decrease of 2% from £
169 billion at 31 December 2000, although this equates to a 2% increase in
funds after adjusting for £7 billion of fund outflows where affiliates have
been sold.  Group funds under management have been assisted by the
strengthening US dollar.  Average US dollar fund levels have decreased by an
average of 10%.  Completed affiliate sales in the US since acquisition have
returned after-tax sale proceeds of $255 million to the Group.


Our banking operations produced an operating profit of £168 million, an
increase of 8% over the equivalent prior year period.  Nedcor, our 53% owned
subsidiary, earned a first half operating profit of £172 million before
exceptional items, an increase of 7% from £161 million in the prior year and
reported positive results from its strategic alliances.  During the period
Nedcor improved its market share, as measured by total assets, to 19%.



Our general insurance operations produced an operating profit of £24 million,
an increase of 4% over the £23 million of the prior year.  Mutual & Federal,
our 51% owned subsidiary, produced an underwriting result of £1 million
compared to a loss of £3 million last year.  Special dividends of £71 million,
paid to shareholders in the last quarter of 2000, have reduced Mutual &
Federal's asset base from which long term investment returns are generated.



Profit after tax and minority interest of £137 million (2000: £39 million)
includes a positive impact of £94 million from short term fluctuations in
investment returns, offset by a write-down of Nedcor's interest in Dimension
Data (before minority interests) of £304 million and goodwill amortisation of
£69 million.



In April, the Group successfully launched a $650 million convertible bond
offer and was pleased with the level of demand for the issue, with proceeds
being used towards the refinancing of the UAM acquisition.  In early July, the
Group secured a £900 million five year revolving credit facility, which
greatly enhances the Group's financial flexibility.



The Board has declared an interim dividend of 1.7p per share, an increase of
6% on last year's interim dividend of 1.6p per share.  This dividend will be
paid to shareholders on the register at the close of business on 19 October
2001 for all the exchanges where Old Mutual plc's shares are listed.  The
shares will trade ex-dividend from the opening of business on 17 October 2001.
The local currency equivalents of the proposed dividend for shareholders on
the South African, Malawi and Zimbabwe branch registers and the Namibian
section of the principal register will be determined using exchange rates on
15 October 2001.  The conversion rates will be announced by the Company on 16
October 2001.



In July, I announced my intention to split my current role as Chairman and
Chief Executive.  The Board has appointed Jim Sutcliffe as Chief Executive of
the Group with effect from 1 November 2001.  Jim's extensive experience and
leadership skills will be key strengths as the Group continues to drive
shareholder value forward.  I would like to take this opportunity to wish him
every success in his new role.



As announced last Friday, the Board has accepted the resignation of Eric
Anstee.  I would like to thank Eric for the enormous contribution that he has
made to the Group.  Scott Powers joined the Group on 1 September to run our US
asset management businesses, and Ed Warner has been promoted to Chief
Executive of Old Mutual Financial Services (UK).  Both Scott and Ed will
report to Jim, who has now assumed Eric's responsibilities.



These results are positive against a background of declining international
equity markets and a further fall in the value of the Rand.  Our focus
continues to be on delivering value from our recently acquired international
businesses, and our core South African operations, to build a strong base for
future growth.

                                                                   MIKE LEVETT

                                                  Chairman and Chief Executive



                                                              4 September 2001




BUSINESS REVIEW



LIFE ASSURANCE



The underlying growth in operating profits before long term investment return
was strong at 19% in Rand terms (7% in Sterling terms).  This growth rate
excludes investment of £9 million in developing our new businesses in the US
(Americom) and UK (due to launch later this year).  Margins on managed assets
and the return on allocated capital remained strong at 2.3% and 24%
respectively.  As part of our drive to improve capital efficiency, we have
used some $500 million previously allocated to the life business to finance
the purchase of UAM.  This reduces the long term investment return allocated
to the life segment, and hence the associated operating profits.



New business profits of £27 million have increased 4% from £26 million last
year.  In Rand terms the new business profit has increased by 14%, principally
due to the impact on Individual Business of changes to the method of financing
acquisition expenses at the end of 2000.  Individual Business volumes in South
Africa were marginally up on last year, but Group Business volumes were
unusually low this year, reflecting the irregular nature and size of their new
business and price competition in Group Life business.  After a poor first
quarter, new business levels have been improving steadily, particularly in the
Individual broker market.



The acquisition of Fidelity & Guaranty Life, which is expected to be completed
within the next two months, will strengthen our presence in the growing US
savings market, and represent another positive step forward, as the Group
builds its international presence.  The deal will provide further US fixed
annuity distribution through managing general agents and complement our
Americom business, which started in May, which writes similar business through
direct telephone contact with independent financial advisers.



In May, our Indian life assurance joint venture, OM Kotak Mahindra, opened for
business in Mumbai and Calcutta, and it now has over 300 sales agents
operating from five branches.



South Africa



Life operating profits before long term investment return from South Africa of
R1,565 million have increased 12% from R1,395 million.  The increase is
largely attributable to an increase in life assets, as a result of positive
equity and bond markets in South Africa.



The embedded value of in-force life business of R8,735 million has increased
by 9% from R7,988 million at the beginning of the year.  This increase is
largely a result of growth in life assets and changes in economic assumptions,
partially offset by the anticipated effect of capital gains tax on future
profits.



Individual Business



Operating profits before long term investment return of R1,085 million have
increased 19% from R909 million.  This principally reflects the increase in
life funds under management, but also increased mortality profits and improved
retention.




Total individual recurring new business premiums have remained flat.  Our
recruitment of new personal financial advisers is progressing well and agent
productivity has improved.  New business sales trends were better in the
second quarter after a disappointing first quarter.  The retail distribution
relationship with Nedcor Personal Financial Planning is progressing well, with
sales increasing 90%.  New single premiums have increased 7% in Rand terms,
reflecting the continued success of our Investment Frontiers product range
which dominates the individual single premium market, and attracted inflows of
R2,948 million during the period, compared to R2,761 million during the
equivalent period in the prior year.



Premiums written by our Group Schemes business have decreased by 8% in Rand
terms, mainly due to higher cancellation experience following the increased
use of debit orders.  We expect this experience to reverse during the third
quarter following the re-opening of the South African Government's Persal stop
order collection system to new business.



The value added by new business of R210 million is more than double that of
R97 million added in the prior year comparative period.  This increase has
arisen mostly through higher new business margins resulting from the reduction
in the cost of financing acquisition expenses achieved in the second half of
2000.



Greenlight, an innovative and competitive range of individual pure insurance
products, was launched in May to complement our existing range of investment
products (Investment Frontiers, Investment Horizons and Essential Savings) and
sales have made a strong start.  Investment Frontiers launched a new range of
offshore products for distribution to South Africans in August, based on the
use of an individual's offshore allowance of R750,000.  The Group intends to
continue to build growth through product innovation, high quality customer and
intermediary service levels and distribution through strategic alliance
channels.



Group Business



Operating profits before long term investment return from our Group Business,
Employee Benefits, of R480 million are in line with last year's strong first
half performance of R486 million.



Single premiums of R1,587 million have decreased by 9% from R1,750 million
last year.  The single premium market consists of large potential clients, so
the timing of secured premium flows significantly affects reported new
business. Recurring new business premiums of R41 million were significantly
lower than the R214 million last year.  The decline in recurring new business
premiums reflects a slowdown in the conversion of defined contribution schemes
to member-level investment choice with the associated purchase of new
investment products, and very aggressive competitor pricing in the Group
Assurance markets.  We have chosen to maintain the quality of our risk book.
Total Group Business margins have remained at 38% of annual premium
equivalent.



A new range of structured products has recently been launched to cater for
those clients who want guarantees but do not wish to invest in smoothed bonus
products.  A customised Platinum Pension product is being offered to pension
funds with very large pensioner liabilities.  Our Orion Umbrella Fund has been
revamped and re-launched, and has started to produce an improvement in sales.




Sales of new administration schemes are now actively being pursued to secure
associated investment and risk business, and investment clients from whom we
have not been receiving regular premiums have been identified and are being
targeted to convert to new products and reactivate premium flow.  Aggressive
marketing of smoothed bonus products on the back of our competitive June 2001
bonus declaration has recently commenced.  The volume of new business secured
since 30 June, and the pipeline for the remainder of the year, is encouraging.



Rest of the World



During the period we have made considerable progress in developing our
international life assurance businesses.  As well as reaching agreement to
purchase Fidelity & Guaranty Life, the Group has invested in new operations in
the US, the UK and India during the period to provide a platform for future
growth.  Operating profit strain from international development is expected to
increase as new business is written, although results are expected to be
positive on an embedded value basis.



Following the acquisition of Unified Life (renamed 'Americom') in the US, the
first two branches of Americom have been opened in Seattle and Los Angeles.
Americom distributes term and annuity products to brokers and will over time
offer universal life products.  Americom currently offers life products in 16
states with more than 1,000 agents.  A roll-out programme is in place for the
remainder of the US.



Our 26% owned Indian joint venture operation, OM Kotak Mahindra, was granted a
licence to sell life assurance business following the relaxation of controls
in the Indian life market.  During May, OM Kotak Mahindra opened two branches
in Calcutta and Mumbai and sold its first endowment and single premium
products.  The encouraging start to sales in these locations has been followed
by the opening of an additional three branches, and we now have an agent force
exceeding 300.



In Pakistan, we have agreed to acquire (subject to regulatory approval) CGNU's
51% stake in Commercial Union Life Assurance Company (Pakistan) Limited, a
company listed on the Karachi Stock Exchange.



FINANCIAL SERVICES



Operating profits for financial services of £90 million have increased 150%
from £36 million.  These results include a contribution of £64 million from
the UAM Group (now collectively referred to as 'Old Mutual (US) Holdings') and
a full six month contribution from the Gerrard Group businesses acquired in
March 2000.



Market levels at 30 June had recovered from the troughs reached towards the
end of the first quarter and funds under management were at similar levels to
year end.  In the US, we attracted positive net fund inflows from our major
asset managers.  Gerrard, where changes in funds under management largely
reflected market movements, had a difficult half-year affected by low market
activity.  Integration plans are proceeding in line with expectations.



Asset Management

Old Mutual (US) Holdings



Operating profits from our US-based asset management operations of £64 million
compares to the £44 million earned in the last three months of 2000.  Fee
income dropped some 10% in local currencies, with asset levels in Pilgrim
Baxter most affected by markets.  Most of the asset decline in the first half
was the result of affiliate divestitures, with funds managed by businesses
retained at the end of the period of £116 billion up 2% when compared to £113
billion at the beginning of the year.



Old Mutual (US) Holdings as a whole attracted more than $5 billion in new
mandates during the first half of 2001 and continues to perform well compared
with benchmarks and peers.  At the end of June 2001, 28 out of the Group's 60
Morningstar-rated funds held four or five stars, compared to 20 out of 60
funds at the end of 2000.



The diversity of the Group enabled it to benefit from the market shift from
growth products towards value products, as net outflows from growth products
began to reverse towards the end of the period.  Net fund flows for Old Mutual
(US) Holdings were flat for the period, however Pilgrim Baxter and the Old
Mutual Asset Managers (US) Group of firms recorded positive net inflows of £
1.6 billion in total.



By the end of June we had completed the planned sales of Investment Research
Company, Cooke & Bieler and Sterling Capital Management.  The sales of Pell
Rudman and Cambiar Investors were completed in early August.  Since
acquisition we have divested eight affiliates, obtaining after-tax sale
proceeds of $255 million to date, which exceeds our expectations at
acquisition.  We continue to work closely and co-operatively with the
remaining affiliates to establish optimal future business models.



In July the Group announced the appointment of Scott Powers as Chief Executive
of Old Mutual (US) Holdings as from 1 September.  We welcome Scott to Old
Mutual and wish him every success in his new role.



Old Mutual Asset Managers (OMAM)



Operating profits from our South and southern African, Bermudan and United
Kingdom-based asset management operations of £14 million has decreased 50%
from £28 million last year.  This was principally due to lower average fund
values within this Group, poor unit trust inflows in South Africa and
development expenditure incurred on our UK institutional business.  We have
also experienced lower net fund inflows in South Africa.



Funds under management at the end of the period of £25 billion have increased
5% from £24 billion at the beginning of the year, reflecting increased South
African market values over the period.  Investment performance remained very
good across specialist mandates, with relative peer performances improving in
the period.



Old Mutual Asset Managers (UK) successfully launched the Old Mutual UK Select
Smaller Companies Fund during the period.  This launch proved to be one of the
most successful retail fund launches so far this year, and achieved the rare
distinction of being awarded the 'AA' rating at launch by independent fund
analysts, Standard & Poors Fund Research.  The Old Mutual European Fund was
relaunched during the period under a new manager, and achieved a rating of 'A'
from Standard & Poors Fund Research.



Old Mutual Unit Trust sales in South Africa were below prior period levels,
but are in line with South African industry results.  We continue to develop
our product suite to serve the appetite of affluent South African customers
for offshore products, and in June launched a range of international unit
trusts, based on using the South African investor's R750,000 allowance.  As
with the Investment Frontiers offshore range of products, we integrated the
capabilities of our Old Mutual International business and our strong local
brand and distribution teams in the affluent South African market in order to
ensure the success of the launch.



Private Client



Gerrard operating profits of £10 million (before integration costs of £6
million), have decreased 17% from £12 million, principally due to lower
commission levels, which fell 33% as a result of reduced equity market
activity.  Market share was maintained however, and fee-based revenues were
resilient during the period.



Funds under management of £19 billion have decreased by 8% since the beginning
of the year, primarily as a result of adverse market performance.  The APCIMS
balanced benchmark has fallen by 6%, and the FTSE 100 index has fallen by 9%,
over the same period.



The integration of the former Capel Cure Sharp and Greig Middleton businesses
is proceeding to plan, with the key implementation of the back office systems
currently being successfully undertaken.  To date, eight offices have
successfully moved to new systems with the remainder transferring in the third
quarter.  The roll-out of the Gerrard brand for the combined businesses took
place in March.  Annualised cost savings in the region of £15 million by 2003
continue to be anticipated, following a total planned spend on integration of
£25 million during 2000 and 2001.  Integration expenditure of £6 million was
incurred in the first half of 2001,with the remaining £5 million anticipated
later in the year.



Internationally, opportunities to expand our services and products continue to
be explored and developed, particularly within the Old Mutual (US) Holdings
Group and in South Africa.



Other Financial Services



Operating profits for the Group's specialist financial services businesses of
£8 million increased 33% from the £6 million in the prior year, principally as
a result of acquisition timing impacts.



Despite generally difficult market conditions, GNI Limited has produced good
results of £7 million for the period, more than double the three month
contribution in 2000.  Results at GNI Fund Management have also improved due
mainly to performance fees earned on hedge products.  In April, we announced
that we would be funding the development of Market Touch, a new Electronic
Crossing Network, designed specifically for retail client orders.  This
venture underlines the importance of GNI's technology to the Group's financial
services businesses.



Old Mutual Securities has produced satisfactory results given the decrease in
market activity this year.  Total revenues of £9 million are on par with the
equivalent prior year period, which benefited from much higher activity
levels.  Commission based revenues have been under pressure this year, while
customer facilitation and corporate revenues remain robust, and have increased
by 15% over the equivalent prior year period.  Our market share of the small
cap market continues to improve.



Old Mutual Specialised Finance has produced strong results with performance
this year benefiting from the introduction of new products in addition to
growth in existing offerings.



BANKING



Banking operating profits of £168 million increased 8% from £156 million.
Banking results principally comprise those of Nedcor, our 53% owned South
African-based subsidiary, whose contribution to Group's operating profit
before minority interests, exceptional items and taxation of £172 million has
increased 7% from £161 million in the first half of 2000.  Despite volatile
market and economic conditions during the current period, strong asset growth
and continued tight cost control has enabled Nedcor to report headline
earnings of R1,485 million, an increase of 21% from R1,230 million for the
equivalent prior year period.



Nedcor also reported an increase in total assets of 31% to R173 billion over
the last 12 months, driven by strong organic growth in the core banking
business and also by acquisitions, notably FBC Fidelity Bank (now Peoples
Bank), Imperial Bank and, in conjunction with Old Mutual, Fleming Offshore
Banking.  Excluding the effects of acquisitions and non-core items, total
asset growth was 15% in Rand terms.  Market share has increased to 19%.



During the six month period net interest income grew by 14% to R2,604 million
and non-interest revenue grew by 15% to R2,309 million.  Nedcor's cost to
income ratio for the period of 51.9% compares favourably to that of the prior
year equivalent period of 52.1%.  During the period expenditure increased by
14% to R2,550 million, significantly influenced by the acquisitions and
start-up costs of the retail joint ventures which are expected to deliver
future growth opportunities.  Excluding these items, expenditure rose by 9%.



The diminution in value of Nedcor's investment in Dimension Data Holdings plc
of R3.5 billion before minority shareholders' interests has been treated as an
exceptional loss, consistent with the methodology applied to the exceptional
gain of R3.6 billion which arose in 2000.



Good progress was made in the period in the integration of the strategic
banking alliances with Capital One, Pick 'n Pay, Imperial Group and JD Group.
The joint ventures with Old Mutual continue to flourish, with the retail joint
venture poised for launch in the third quarter.  Other alliances are expected
to break even this year and contribute to profits next year.  These strategic
alliances give Nedcor access to millions of potential new customers without
incurring significant capital expenditure.



The effective application of technology by Nedcor continues to be instrumental
in driving down Nedcor's cost to income ratio.  There are also encouraging
early indications that it may be possible to sell this expertise to offshore
customers.




GENERAL INSURANCE



Mutual & Federal, our 51% owned South African-based general insurance
subsidiary, has contributed £24 million to the Group's operating profits
before tax, including long term investment returns.  This is a 4% increase
over the equivalent prior year period of £23 million.



The Group's underwriting result on a UK GAAP basis for the period was a
positive R11 million compared to a deficit of R31 million for the equivalent
prior year period, largely as a result of the corrective measures undertaken
on the motor account and lower claims incidence.  The integration of the
recently acquired CGNU business has progressed well and is expected to be
complete by the end of the year.  Trading conditions reflect the continuing
improvement in the underwriting cycle and there has been some evidence of
rates continuing to harden in many sectors of the industry.



Net premium income of R2,151 million increased by 55% from R1,387 million in
the first half of last year, largely as a result of acquired business.
Expense management continues to be a focus of Mutual & Federal, and expense
levels have been well contained during the current period.  Solvency margins,
being the ratio of net assets to net premiums, remained high and were in
excess of 85% in Rand terms at the end of the period.



During the period the acquisition of the agricultural insurer, Sentrasure, was
finalised and Mutual & Federal now owns 100% of the company.  It is expected
that this acquisition will enable the combined Group to derive significant
synergies and economies of scale to provide future competitive advantage.





      INDEPENDENT REVIEW BY KPMG AUDIT PLC TO OLD MUTUAL PLC


      Introduction


      We have been instructed by the company to review the financial
      information set out on pages 12 to 33 and we have read the other
      information contained in the interim report and considered whether it
      contains any apparent misstatements or material inconsistencies with the
      financial information.



      Directors' responsibilities


      The interim report, including the financial information contained
      therein, is the responsibility of, and has been approved by, the
      directors.  The directors are responsible for preparing the interim
      report in accordance with the Listing Rules of the Financial Services
      Authority which require that the accounting policies and presentation
      applied to the interim figures should be consistent with those applied in
      preparing the preceding annual accounts except where any changes, and the
      reasons for them, are disclosed.

      Review work performed


      We conducted our review in accordance with guidance contained in Bulletin
      1999/4 issued by the Auditing Practices Board for use in the United
      Kingdom.  A review consists principally of making enquiries of group
      management and applying analytical procedures to the financial
      information and underlying financial data and, based thereon, assessing
      whether the accounting policies and presentation have been consistently
      applied unless otherwise disclosed.   A review excludes audit procedures
      such as tests of controls and verification of assets, liabilities and
      transactions.  It is substantially less in scope than an audit performed
      in accordance with United Kingdom Auditing Standards and therefore
      provides a lower level of assurance than an audit.  Accordingly, we do
      not express an audit opinion on the financial information.

      Review conclusion


      On the basis of our review we are not aware of any material modifications
      that should be made to the financial information as presented for the six
      months ended 30 June 2001.

      KPMG Audit Plc

      Chartered Accountants

      London

      4 September 2001




END


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