Old Mutual plc 2016 Interim Results - Part 2

RNS Number : 8716G

Old Mutual PLC

11 August 2016

 

Part 3 - Financial information

Index to the financial information For the six months ended 30 June 2016
Statement of directors' responsibilities in respect of the interim financial statements for the six months ended 30 June 2016		64
Independent review report to Old Mutual plc for the six months ended 30 June 2016		65
Consolidated income statement		66
Consolidated statement of comprehensive income		67
Reconciliation of adjusted operating profit to profit after tax		68
Consolidated statement of financial position		70
Consolidated statement of cash flows		71
Consolidated statement of changes in equity		72
Notes to the consolidated financial statements
	A: Significant accounting policies	78
	B: Segment information	80
	C: Other key performance information	94
	D: Other income statement notes	101
	E: Financial assets and liabilities	103
	F: Analysis of financial assets and liabilities	115
	G: Non-financial assets and liabilities	126
	H: Other notes	127
	I: Discontinued operations and disposal groups held for sale	128

Statement of directors' responsibilities in respect of the interim financial statements

For the six months ended 30 June 2016

We confirm that to the best of our knowledge:

§  The Group interim financial statements contained herein are presented in accordance with the requirements of IAS 34 'Interim Financial Reporting' as adopted by the EU.

§  The interim management statement includes a fair review of the information required by:

(a)     DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b)     DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

Bruce Hemphill                                                                        Ingrid Johnson
Group Chief Executive                                                                Group Finance Director
11 August 2016                                                                          11 August 2016

Independent review report to Old Mutual plc

For the six months ended 30 June 2016

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2016 which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity and the related explanatory notes, which include the reconciliation of adjusted operating profit to profit after tax. 

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. 

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ('the DTR') of the UK's Financial Conduct Authority ('the UK FCA').  Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA. 

The annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU. 

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. 

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion. 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.  

Jonathan Holt (Senior Statutory Auditor)

for and on behalf of KPMG LLP

Chartered Accountants
15 Canada Square
London E14 5GL
11 August 2016

Consolidated income statement
For the six months ended 30 June 2016
								£m
		Notes		Six months ended 30 June 2016		Six months ended 30 June  2015		Year ended 31 December 2015
Revenue
Gross earned premiums		B2		1,703		1,589		3,589
Outward reinsurance				(178)		(151)		(335)
Net earned premiums				1,525		1,438		3,254
Investment return (non-banking)				2,947		3,186		3,795
Banking interest and similar income				1,609		1,691		3,320
Banking trading, investment and similar income				100		110		213
Fee and commission income, and income from service activities				1,395		1,537		3,027
Other income				72		70		86
Total revenue				7,648		8,032		13,695
Expenses
Claims and benefits (including change in insurance contract provisions)				(1,960)		(1,738)		(3,450)
Reinsurance recoveries				209		120		279
Net claims and benefits incurred				(1,751)		(1,618)		(3,171)
Change in investment contract liabilities				(1,837)		(2,035)		(2,203)
Credit impairment charges				(116)		(134)		(307)
Finance costs				(38)		(45)		(49)
Banking interest payable and similar expenses				(924)		(962)		(1,924)
Fee and commission expenses, and other acquisition costs				(330)		(459)		(786)
Change in third-party interest in consolidated funds				(244)		(207)		(208)
Other operating and administrative expenses				(1,813)		(1,928)		(3,759)
Total expenses				(7,053)		(7,388)		(12,407)
Share of associated undertakings' and joint ventures' (losses)/profit after tax				(11)		37		67
Profit/(loss) on disposal of subsidiaries, associated undertakings and strategic    investments		C1(c)		24		2		(36)
Profit before tax				608		683		1,319
Income tax expense		D1		(183)		(243)		(374)
Profit from continuing operations after tax				425		440		945
Discontinued operations
Loss from discontinued operations after tax		I1		-		(21)		(21)
Profit after tax for the financial period				425		419		924
Attributable to
Equity holders of the parent				284		260		614
Non-controlling interests
Ordinary shares				133		149		291
Preferred securities				8		10		19
Profit after tax for the financial period				425		419		924
Earnings per ordinary share
Basic earnings per share based on profit from continuing    operations (pence)				5.7		5.9		13.2
Basic earnings per share based on profit from discontinued    operations (pence)				-		(0.5)		(0.5)
Basic earnings per ordinary share (pence)		C2(a)		5.7		5.4		12.7
Diluted basic earnings per share based on profit from continuing    operations (pence)				5.6		5.4		12.6
Diluted basic earnings per share based on profit from discontinued    operations (pence)				-		(0.4)		(0.4)
Diluted basic earnings per ordinary share (pence)		C2(b)		5.6		5.0		12.2
Weighted average number of ordinary shares (millions)		C2(a)		4,686		4,598		4,641
Consolidated statement of comprehensive income
For the six months ended 30 June 2016
								£m
			Six months ended  30 June 2016			Six months ended 30 June 2015		Year ended  31 December  2015
Profit after tax for the financial period			425			419		924
Other comprehensive income for the financial period
Items that will not be reclassified subsequently to profit or loss
Fair value movements
Property revaluation			(1)			(2)		18
Measurement movements on defined benefit plans			7			8		20
Income tax on items that will not be reclassified subsequently to profit or loss	D1(c)		6			-		(4)
			12			6		34
Items that may be reclassified subsequently to profit or loss
Fair value movements
Net investment hedge			(42)			6		13
Available-for-sale investments
Fair value gains/(losses)			7			(9)		(7)
Recycled to profit or loss			-			-		(5)
Exchange difference recycled to profit or loss on disposal of business			-			(30)		(71)
Shadow accounting			-			-		(10)
Currency translation differences on translating foreign operations			962			(442)		(1,106)
Other movements			(28)			(13)		(24)
			899			(488)		(1,210)
Total other comprehensive income for the financial period			911			(482)		(1,176)
Total comprehensive income for the financial period			1,336			(63)		(252)
Attributable to
Equity holders of the parent			933			(86)		(232)
Non-controlling interests
Ordinary shares			395			13		(39)
Preferred securities			8			10		19
Total comprehensive income for the financial period			1,336			(63)		(252)
Reconciliation of adjusted operating profit to profit after tax
For the six months ended 30 June 2016
							£m
	Notes		Six months ended 30 June 2016		Six months ended  30 June  2015		Year ended 31 December 2015
Core operations
Emerging Markets	B3		260		333		615
Nedbank	B3		345		404		754
Old Mutual Wealth	B3		104		151		307
Institutional Asset Management	B3		58		83		149
			767		971		1,825
Old Mutual plc finance costs			(45)		(42)		(83)
Long-term investment return on excess assets			10		11		21
Corporate costs			(30)		(24)		(57)
Other net shareholder income/(expenses)			6		(12)		(43)
Adjusted operating profit before tax	B3		708		904		1,663
Adjusting items	C1(a)		(117)		(260)		(344)
Non-core operations	B3		(9)		4		(31)
Profit before tax (net of policyholder tax)			582		648		1,288
Income tax attributable to policyholder returns			26		35		31
Profit before tax			608		683		1,319
Total tax expense	D1(a)		(183)		(243)		(374)
Profit from continuing operations after tax			425		440		945
Loss from discontinued operations after tax	I1		-		(21)		(21)
Profit after tax for the financial period			425		419		924
Adjusted operating profit after tax attributable to ordinary equity holders of the parent
							£m
	Notes		Six months ended 30 June 2016		Six months ended  30 June  2015		Year ended 31 December 2015
Adjusted operating profit before tax	B3		708		904		1,663
Tax on adjusted operating profit	D1(d)		(181)		(235)		(403)
Adjusted operating profit after tax			527		669		1,260
Non-controlling interests - ordinary shares			(137)		(157)		(310)
Non-controlling interests - preferred securities			(8)		(10)		(19)
Adjusted operating profit after tax attributable to ordinary equity    holders of the parent	B3		382		502		931
Adjusted weighted average number of shares (millions)	C2(a)		4,773		4,855		4,813
Adjusted operating earnings per share (pence)	C2(c)		8.0		10.3		19.3

 

Basis of preparation of adjusted operating profit

Adjusted operating profit (AOP) reflects the directors' view of the underlying long-term performance of the Group. AOP is a measure of profitability which adjusts the IFRS profit measures for the specific items detailed in note C1 and, as such, it is a non-IFRS measure. The reconciliation of adjusted operating profit to profit after tax explains the differences between AOP and profit after tax as reported under IFRS.

For core life assurance and property & casualty businesses, AOP is based on a long-term investment return, including returns on investments held by life funds in Group equity and debt instruments, and is stated net of income tax attributable to policyholder returns. For all core businesses, AOP excludes goodwill impairment, the impact of accounting for intangibles acquired in a business combination, the costs related to completed acquisitions, revaluations of put options related to long-term incentive schemes, profit/(loss) on acquisition/disposal of subsidiaries, associated undertakings and strategic investments, fair value profits/(losses) on certain Group debt instruments, cost of hedging equity instruments and costs related to the development of new Old Mutual Wealth platform capability and outsourcing of UK business administration. AOP includes dividends declared to holders of perpetual preferred callable securities. Old Mutual Bermuda is treated as a non-core operation in the AOP disclosure and is therefore not included in AOP. Refer to note B1 for further information on the basis of segmentation.

Although execution of the Group's strategy of managed separation is expected to entail a number of costs that may be regarded as non-operating, or one-off in nature, all costs associated with the managed separation of the Group are recognised within both IFRS profit and AOP.

Adjusted operating earnings applied in the calculation of adjusted operating earnings per share is calculated based on AOP after tax and non-controlling interests. It excludes income attributable to Black Economic Empowerment trusts of listed subsidiaries. The calculation of the adjusted weighted average number of shares includes own shares held in policyholders' funds and Black Economic Empowerment trusts.

Consolidated statement of financial position
At 30 June 2016
								£m
		Notes		At 30 June 2016		At 30 June 2015		At 31 December 2015
Assets
Goodwill and other intangible assets		G1		3,342		3,344		3,276
Mandatory reserve deposits with central banks				866		808		716
Property, plant and equipment				794		726		700
Investment property				1,508		1,318		1,233
Deferred tax assets				311		247		284
Investments in associated undertakings and joint ventures				527		470		514
Deferred acquisition costs				729		804		784
Reinsurers' share of policyholder liabilities		F2		3,058		2,394		2,661
Loans and advances		F1		36,801		34,655		30,965
Investments and securities				88,996		87,033		82,601
Current tax receivable				136		95		88
Trade, other receivables and other assets				3,368		2,938		2,007
Derivative financial instruments				1,541		1,161		3,076
Cash and cash equivalents				3,978		5,034		4,520
Assets held for sale		I2		6,098		1,114		123
Total assets				152,053		142,141		133,548
Liabilities
Long-term business insurance policyholder liabilities		F2		9,183		9,851		7,714
Investment contract liabilities		F2		69,040		68,786		67,854
Property & casualty liabilities		F2		425		394		341
Third-party interests in consolidated funds				6,585		5,678		4,661
Borrowed funds		F3		4,231		3,566		3,524
Provisions and accruals				158		228		199
Deferred revenue				254		291		274
Deferred tax liabilities				408		476		417
Current tax payable				207		169		186
Trade, other payables and other liabilities				5,631		5,173		3,787
Amounts owed to bank depositors				38,607		36,000		32,328
Derivative financial instruments				1,584		1,161		3,317
Liabilities held for sale		I2		5,853		833		12
Total liabilities				142,166		132,606		124,614
Net assets				9,887		9,535		8,934
Shareholders' equity
Equity attributable to equity holders of the parent				7,258		7,188		6,680
Non-controlling interests
Ordinary shares				2,316		2,075		1,982
Preferred securities				313		272		272
Total non-controlling interests				2,629		2,347		2,254
Total equity				9,887		9,535		8,934
Bruce Hemphill                                                                        Ingrid Johnson Group Chief Executive                                                                Group Finance Director 11 August 2016                                                                          11 August 2016
Consolidated statement of cash flows
For the six months ended 30 June 2016
							£m
			Six months ended 30 June 2016		Six months ended 30 June 2015		Year ended 31 December 2015
Cash flows from operating activities
Profit before tax			608		683		1,319
Non-cash movements in profit before tax			2,268		1,134		4,204
Net changes in working capital			(327)		866		566
Taxation paid			(234)		(252)		(399)
Net cash inflow from operating activities			2,315		2,431		5,690
Cash flows from investing activities
Net acquisitions of financial investments			(3,019)		(1,787)		(4,868)
Acquisition of investment properties			(40)		(37)		(146)
Dividends received from associated undertakings			9		3		7
Proceeds from disposal of investment properties			77		4		41
Acquisition of property, plant and equipment			(52)		(35)		(151)
Proceeds from disposal of property, plant and equipment			1		3		7
Acquisition of intangible assets			(47)		(40)		(102)
Acquisition of interests in subsidiaries, associated undertakings    joint ventures and strategic investments			(23)		(625)		(796)
Disposal of a non-controlling interest in OM Asset Management plc			-		163		163
Proceeds from the disposal of interests in subsidiaries, associated    undertakings joint ventures and strategic investments			22		9		88
Net cash outflow from investing activities			(3,072)		(2,342)		(5,757)
Cash flows from financing activities
Dividends paid to
Ordinary equity holders of the Company			(299)		(296)		(422)
Non-controlling interests and preferred security interests			(95)		(108)		(190)
Interest paid (excluding banking interest paid)			(35)		(24)		(51)
Proceeds from issue of ordinary shares (including by subsidiaries    to non-controlling interests)			1		2		2
Net acquisition of treasury shares			(37)		(12)		(19)
Sale of shares held by BEE trusts			-		172		175
Proceeds from issue of subordinated and other debt			415		880		1,615
Subordinated and other debt repaid			(27)		(349)		(827)
Net cash (outflow)/inflow from financing activities			(77)		265		283
Net increase in cash and cash equivalents			(834)		354		216
Effects of exchange rate changes on cash and cash equivalents			439		(270)		(746)
Cash and cash equivalents at beginning of the period			5,256		5,786		5,786
Cash and cash equivalents at end of the period			4,861		5,870		5,256
Consisting of
Cash and cash equivalents			3,978		5,034		4,520
Mandatory reserve deposits with central banks			866		808		716
Cash and cash equivalents included in assets held for sale			17		28		20
Total			4,861		5,870		5,256

Cash and cash equivalents in the cash flow statement above include mandatory reserve deposits, in line with market practice in South Africa. Except for mandatory reserve deposits with central banks of £866 million (June 2015: £808 million; December 2015: £716 million) and cash and cash equivalents subject to consolidation of funds of £1,144 million (June 2015: £1,373 million; December 2015: £1,643 million), management do not consider that there are any material amounts of cash and cash equivalents which are not available for use in the Group's day-to-day operations.

Consolidated statement of changes in equity
For the six months ended 30 June 2016
		Millions
Six months ended 30 June 2016	Notes	Number of shares issued and fully paid		Share capital	Share premium	Merger reserve	Available-for-sale reserve
Shareholders' equity at beginning of the period		4,929		563	1,040	1,252	40
Total comprehensive income for the financial period
Profit after tax for the financial period		-		-	-	-	-
Other comprehensive income
Items that will not be reclassified subsequently to   profit or loss
Fair value gains
Property revaluation		-		-	-	-	-
Measurement gains on defined benefit plans		-		-	-	-	-
Income tax on items that will not be reclassified   subsequently to profit or loss	D1(c)	-		-	-	-	-
		-		-	-	-	-
Items that may be reclassified subsequently to profit   or loss
Fair value gains/(losses)
Net investment hedge		-		-	-	-	-
Available-for-sale investments
Fair value (losses)/gains1		-		-	-	-	(2)
Recycled to profit or loss		-		-	-	-	-
Currency translation differences on translating foreign   operations1		-		-	-	-	-
Other movements		-		-	-	-	-
Total comprehensive income for the financial period		-		-	-	-	(2)
Transactions with the owners of the Company
Contributions and distributions
Dividends for the period	C3	-		-	-	-	-
Tax relief on dividends paid		-		-	-	-	-
Equity share-based payment transactions		-		-	-	-	-
OM Asset Management plc shares buyback		-		-	-	-	-
Additional tier 1 capital instruments issued2		-		-	-	-	-
Preferred securities repurchased		-		-	-	-	-
Other movements in share capital		1		-	1	-	-
Total contributions and distributions		1		-	1	-	-
Changes in ownership
Change in participation in subsidiaries		-		-	-	-	-
Total changes in ownership		-		-	-	-	-
Total transactions with the owners of the Company		1		-	1	-	-
Shareholders' equity at end of the period		4,930		563	1,041	1,252	38

¹        Included in other reserves is a gain of £10 million relating to Economic Transactional Bank (ETI) available-for-sale reserve. Currency translation differences on translating foreign operations include £63 million relating to foreign exchange losses on translation of ETI.

²        Nedbank issued a new-style (Basel III-compliant) additional tier 1 capital instrument of £67 million (R1,524 million) in May 2016 at JIBAR + 7%. In line with regulations and subject to regulatory approval, these instruments are callable only at the option of the issuer on 21 May 2021 and any interest payment date thereafter.

														£m
Property revaluation reserve	Share-based payments reserve	Other reserves1	Foreign currency translation reserve1		Retained earnings		Perpetual preferred callable securities			Attributable to equity holders  of the parent		Total non-controlling interests		Total equity
184	367	30	(2,243)		5,174		273			6,680		2,254		8,934
-	-	-	-		268		16			284		141		425
(1)	-	-	-		-		-			(1)		-		(1)
-	-	-	-		6		-			6		1		7
-	4	-	-		-		-			4		2		6
(1)	4	-	-		6		-			9		3		12
-	-	-	(42)		-		-			(42)		-		(42)
-	-	10	-		(4)		-			4		3		7
-	-	-	-		-		-			-		-		-
-	-	-	694		-		-			694		268		962
(3)	-	(5)	-		(8)		-			(16)		(12)		(28)
(4)	4	5	652		262		16			933		403		1,336
-	-	-	-		(299)		(17)			(316)		(78)		(394)
-	-	-	-		-		1			1		-		1
-	(6)	-	-		7		-			1		(5)		(4)
-	-	-	-		(8)		-			(8)		(3)		(11)
-	-	-	-		-		-			-		67		67
-	-	-	-		-		-			-		(26)		(26)
-	-	-	-		(37)		-			(36)		-		(36)
-	(6)	-	-		(337)		(16)			(358)		(45)		(403)
-	-	-	-		3		-			3		17		20
-	-	-	-		3		-			3		17		20
-	(6)	-	-		(334)		(16)			(355)		(28)		(383)
180	365	35	(1,591)		5,102		273			7,258		2,629		9,887
Consolidated statement of changes in equity
For the six months ended 30 June 2016
						Millions
Six months ended 30 June 2015				Notes		Number of shares issued and fully paid			Share capital		Share premium		Merger reserve		Available-for-sale reserve
Shareholders' equity at beginning of the period						4,907			561		856		1,342		48
Total comprehensive income for the financial period
Profit after tax for the financial period						-			-		-		-		-
Other comprehensive income
Items that will not be reclassified subsequently to   profit or loss
Fair value gains
Property revaluation						-			-		-		-		-
Measurement gains on defined benefit plans						-			-		-		-		-
Income tax on items that will not be reclassified   subsequently to profit or loss				D1(c)		-			-		-		-		-
						-			-		-		-		-
Items that may be reclassified subsequently to profit   or loss
Fair value gains/(losses)
Net investment hedge						-			-		-		-		-
Available-for-sale investments
Fair value gains						-			-		-		-		-
Exchange differences recycled to profit or loss    on disposal of business						-			-		-		-		-
Currency translation differences on translating foreign   operations						-			-		-		-		-
Other movements						-			-		-		-		-
Total comprehensive income for the financial period						-			-		-		-		-
Transactions with the owners of the Company
Contributions and distributions
Dividends for the year				C3		-			-		-		-		-
Tax relief on dividends paid						-			-		-		-		-
Equity share-based payment transactions						-			-		-		-		-
Proceeds from BEE transactions						-			-		141		-		-
Merger reserve released						-			-		-		(68)		-
Other movements in share capital						2			-		2		-		-
Total contributions and distributions						2			-		143		(68)		-
Changes in ownership
Shares issued for the acquisition of Quilter Cheviott						19			2		40		-		-
Share in movement in associate reserve						-			-		-		-		-
Disposal of a non-controlling interest in    OM Asset Management plc						-			-		-		-		-
Non-controlling interests in subsidiaries acquired						-			-		-		-		-
Change in participation in subsidiaries						-			-		-		-		-
Total changes in ownership						19			2		40		-		-
Total transactions with owners of the Company						21			2		183		(68)		-
Shareholders' equity at end of the period						4,928			563		1,039		1,274		48

														£m
Property revaluation reserve	Share-based payments reserve	Other reserves	Foreign currency translation reserve		Retained earnings		Perpetual preferred callable securities			Attributable to equity holders  of the parent		Total non-controlling interests		Total equity
178	337	37	(1,370)		4,891		526			7,406		2,139		9,545
-	-	-	-		246		14			260		159		419
(2)	-	-	-		-		-			(2)		-		(2)
-	-	-	-		6		-			6		2		8
-	-	-	-		-		-			-		-		-
(2)	-	-	-		6		-			4		2		6
-	-	-	6		-		-			6		-		6
-	-	(9)	-		4		-			(5)		(4)		(9)
-	-	-	(65)		35		-			(30)		-		(30)
-	-	-	(306)		-		-			(306)		(136)		(442)
-	-	-	-		(15)		-			(15)		2		(13)
(2)	-	(9)	(365)		276		14			(86)		23		(63)
-	-	-	-		(296)		(17)			(313)		(91)		(404)
-	-	-	-		-		3			3		-		3
-	(15)	-	-		(3)		-			(18)		(4)		(22)
-	-	-	-		31		-			172		-		172
-	-	-	-		68		-			-		-		-
-	-	-	-		(14)		-			(12)		-		(12)
-	(15)	-	-		(214)		(14)			(168)		(95)		(263)
-	-	-	-		(42)		-			-		-		-
-	-	10	-		-		-			10		-		10
-	-	-	-		48		-			48		114		162
-	-	-	-		-		-			-		98		98
-	-	-	-		(22)		-			(22)		68		46
-	-	10	-		(16)		-			36		280		316
-	(15)	10	-		(230)		(14)			(132)		185		53
176	322	38	(1,735)		4,937		526			7,188		2,347		9,535
Consolidated statement of changes in equity
For the six months ended 30 June 2016
						Millions
Year ended 31 December 2015				Notes		Number of shares issued and fully paid			Share capital		Share premium		Merger reserve		Available-for-sale reserve
Shareholders' equity at beginning of the year						4,907			561		856		1,342		48
Total comprehensive income for the financial year
Profit after tax for the financial year						-			-		-		-		-
Other comprehensive income
Items that will not be reclassified subsequently to   profit or loss
Fair value gains
Property revaluation						-			-		-		-		-
Measurement gains on defined benefit plans						-			-		-		-		-
Income tax on items that will not be reclassified   subsequently to profit or loss				D1(c)		-			-		-		-		-
						-			-		-		-		-
Items that may be reclassified subsequently to profit   or loss
Fair value gains/(losses)
Net investment hedge						-			-		-		-		-
Available-for-sale investments
Fair value gains						-			-		-		-		-
Recycled to profit or loss						-			-		-		-		(5)
Exchange differences recycled to profit or loss    on disposal of business						-			-		-		-		-
Shadow accounting						-			-		-		-		-
Currency translation differences on translating foreign   operations						-			-		-		-		-
Other movements						-			-		-		-		(3)
Total comprehensive income for the financial year						-			-		-		-		(8)
Transactions with the owners of the Company
Contributions and distributions
Dividends for the year				C3		-			-		-		-		-
Tax relief on dividends paid						-			-		-		-		-
Equity share-based payment transactions						-			-		-		-		-
Proceeds from BEE transactions						-			-		141		-		-
Merger reserve released1						-			-		-		(90)		-
Preferred securities repurchased						-			-		-		-		-
Other movements in share capital						3			-		3		-		-
Total contributions and distributions						3			-		144		(90)		-
Changes in ownership
Shares issued for the acquisition of Quilter Cheviott						19			2		40		-		-
Share in movement in associate reserve						-			-		-		-		-
Disposal of a non-controlling interest in    OM Asset Management plc						-			-		-		-		-
Non-controlling interests in subsidiaries acquired						-			-		-		-		-
Change in participation in subsidiaries						-			-		-		-		-
Total changes in ownership						19			2		40		-		-
Total transactions with owners of the Company						22			2		184		(90)		-
Shareholders' equity at end of the year						4,929			563		1,040		1,252		40
														£m
Property revaluation reserve	Share-based payments reserve	Other reserves	Foreign currency translation reserve		Retained earnings		Perpetual preferred callable securities			Attributable to equity holders  of the parent		Total non-controlling interests		Total equity
178	337	37	(1,370)		4,891		526			7,406		2,139		9,545
-	-	-	-		590		24			614		310		924
18	-	-	-		(5)		-			13		5		18
-	-	-	-		13		-			13		7		20
(3)	-	-	-		(1)		-			(4)		-		(4)
15	-	-	-		7		-			22		12		34
-	-	-	13		-		-			13		-		13
-	-	(7)	-		3		-			(4)		(3)		(7)
-	-	-	-		-		-			(5)		-		(5)
-	-	-	(71)		-		-			(71)		-		(71)
(10)	-	-	-		-		-			(10)		-		(10)
-	-	-	(780)		-		-			(780)		(326)		(1,106)
1	-	(3)	-		(6)		-			(11)		(13)		(24)
6	-	(10)	(838)		594		24			(232)		(20)		(252)
-	-	-	-		(422)		(30)			(452)		(160)		(612)
-	-	-	-		-		6			6		-		6
-	30	-	-		5		-			35		4		39
-	-	-	-		34		-			175		-		175
-	-	-	-		90		-			-		-		-
-	-	-	-		(11)		(253)			(264)		-		(264)
-	-	-	-		(19)		-			(16)		-		(16)
-	30	-	-		(323)		(277)			(516)		(156)		(672)
-	-	-	-		(42)		-			-		-		-
-	-	3	-		-		-			3		-		3
-	-	-	(35)		84		-			49		114		163
-	-	-	-		-		-			-		105		105
-	-	-	-		(30)		-			(30)		72		42
-	-	3	(35)		12		-			22		291		313
-	30	3	(35)		(311)		(277)			(494)		135		(359)
184	367	30	(2,243)		5,174		273			6,680		2,254		8,934

A: Significant accounting policies

A1: Basis of preparation

The Group interim financial statements contained herein are presented in accordance with the requirements of IAS 34 'Interim Financial Reporting' and are in compliance with IAS 34 as adopted by the EU. The Group's results for the six months ended 30 June 2016 and the financial position at that date have been prepared using accounting policies consistent with those applied in the preparation of the Group's 2015 Annual Report and Accounts. The results for the six months ended 30 June 2016 and the six months ended 30 June 2015, and the financial positions at these dates are unaudited. The results for the year ended 31 December 2015 and the financial position at this date are audited.

The Group interim financial statements have been prepared on the going concern basis, which the directors believe is appropriate. Part 2 - Financial Performance of the Interim Management Statement provides further details on the performance of the Group and the principal risks and uncertainties.

The comparative figures for the financial year ended 31 December 2015 represent the consolidated performance of the Group. They are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Translation of foreign operations

The assets and liabilities of foreign operations are translated from their respective functional currencies into the Group's presentation currency using the period end exchange rates, and their income and expenses using the average exchange rates. Other than in respect of cumulative translation gains and losses up to 1 January 2004, cumulative unrealised gains or losses resulting from translation of functional currencies to the presentation currency are included as a separate component of shareholders' equity. To the extent that these gains and losses are effectively hedged, the cumulative effect of such gains and losses arising on the hedging instruments are also included in that component of shareholders' equity. Upon the disposal of subsidiaries the cumulative amount of exchange differences deferred in shareholders' equity, net of attributable amounts in relation to net investments, is recognised in the income statement.

The exchange rates used to translate the operating results, assets and liabilities of key foreign business segments to pounds sterling are:

	Six months ended 30 June 2016		Six months ended 30 June 2015		Year ended 31 December 2015
	Income statement (average rate)	Statement of financial position (closing rate)	Income Statement (average rate)	Statement of financial position (closing rate)	Income statement (average rate)	Statement of financial position  (closing rate)
Rand	22.0983	19.4900	18.1583	19.1081	19.5223	22.8183
US dollars	1.4339	1.3268	1.5240	1.5725	1.5285	1.4734
Euro	1.2845	1.1982	1.3640	1.4099	1.3765	1.3560

New standards, interpretations and amendments adopted by the Group affecting the financial statements for the six months ended 30 June 2016

During the period, there were no new standards implemented that had a material effect on the financial statements of the Group.

A2: Significant corporate activity and business changes during the year

Acquisitions completed during the period

Acquisition of AAM Advisory (AAM)

On 16 March 2016, Old Mutual Wealth completed the acquisition of 100% of AAM, a Singapore based wealth advice company. The consideration payable was an initial SGD 14 million (£7 million) with additional potential deferred consideration of SGD 26 million (£13 million), which is subject to AAM meeting certain performance targets for the period from 2016 to 2018.

Goodwill of £3 million and other intangible assets of £3 million were recognised as a result of the transaction.

Purchase of remaining stake in Credit Guarantee Insurance Company (CGIC)

On 1 March 2016 Emerging Markets acquired the remaining 13.9% of the shares in CGIC for R190 million (£10 million) taking its share to 100%. This transaction has resulted in a debit being directly recognised in reserves of R78 million (£4 million), which is the excess of the consideration paid and the proportionate share of the net assets of CGIC acquired.

Acquisitions and activities announced but not completed during the period

Acquisition of Landmark Partners

On 14 June 2016, OM Asset Management plc (OMAM) announced that it signed a definitive agreement to acquire a 60% equity interest in Landmark Partners, a leading global secondary private equity, real estate and real asset investment firm for approximately $240 million in cash with the potential for an additional payment based on the growth of the business through to 2018.  The transaction is subject to regulatory approvals and is expected to close in the third quarter of 2016.

Amendment of the OMAM Seed Capital Agreement

On 13 June, 2016, OMAM and Old Mutual plc entered into a Heads of Agreement amending certain terms of the Seed Capital Agreement, dated 8 October 2014. The amendments will result in OMAM purchasing approximately $35 million of seed capital investments in the third quarter of 2016, as well as all remaining seed capital investments covered by the Seed Capital Agreement, up to an incremental $100 million, on or around 30 June  2017. All seed capital was originally expected to be transferred to OMAM's balance sheet on or around 15 January 2018.

Amendment of the OMAM Deferred Tax Asset Deed (DTA)

On 13 June 2016, OMAM and OM Group (UK) Limited (OMGUK) entered into a Heads of Agreement amending the DTA to provide that the obligations of OMAM to make future payments to OMGUK under the DTA, which were originally scheduled to continue until 31 January 2020, would be terminated as of 31 December 2016 in exchange for a payment of the net present value of the future payments due to OMGUK valued as of 31 December 2016. The valuation will be calculated using a discount rate of 8.5% and be paid by OMAM to OMGUK in three instalments on each of 30 June 2017, 31 December 2017 and 30 June 2018, such payments forward valued at a discount rate of 8.5%.  OMAM's current estimate of total payments to be made during this period ranges from $135 million to $145 million.  Payments under the DTA will continue as scheduled for the remainder of 2016.

Disposals completed during the period

Disposal of Rogge Global Partners Limited

On 31 May 2016, the Group completed the sale of its interest in Rogge Global Partners Limited (Rogge), a fixed income asset manager, to Allianz Global Investors GmbH. The sales proceeds received are subject to adjustment as amounts could either be clawed back or future amounts become payable based on Rogge's future performance. A profit on disposal of £12 million has been recognised, which reflects the directors' current assessment of the likely final amount recoverable.

Disposals announced but not completed during the period

Disposal of Old Mutual Wealth Italy

On 9 August 2016, the Group announced that it has agreed to sell Old Mutual Wealth Italy, part of the Old Mutual Wealth business, to ERGO Italia, owned by Cinven. The consideration for the transaction is €278 million in cash, plus interest to completion. The transaction is subject to regulatory approval and is expected to complete within the next six months.

A goodwill impairment loss of £44 million has been recognised in profit or loss as the net asset value of the business disposed of exceed the expected net proceeds. The related assets and liabilities have been classified as held for sale. Refer to note I2 for more information.

Financing activities during the period

Nedbank

Nedbank issued and redeemed debt instruments in the normal course of its funding program. Refer to note F3 for further information.

A3: Critical accounting estimates and judgements

In the preparation of these condensed financial statements, the Group is required to make estimates and judgements that affect items reported in the consolidated income statement, statement of financial position, and other primary statements and related supporting notes.

Critical accounting estimates and judgements are those which involve the most complex or subjective judgements or assessments. Where applicable, the Group applies estimation and assumption setting techniques that are aligned with relevant actuarial and accounting guidance based on knowledge of the current situation and require assumptions and predictions of future events and actions. During the period, there have been no other significant changes to the areas of critical accounting estimates and judgements that the Group applied at 31 December 2015.

The key areas of the Group's business that typically require such estimates and the relevant accounting policies and notes are set out in the following notes of the 2015 Annual Report and Accounts:

Area		Policy note	More detail
	Loans and advances	G1	G1
	Insurance and investment contracts	G6	G6
	Goodwill and other intangible assets	H1	H1
	Consolidation	I1	I3
	Tax	D1	D1/H7

B: Segment information

B1: Basis of segmentation

Segment presentation

There have been no changes to the presentation of segment information for the six months ended 30 June 2016.

The Group's reported segments are Emerging Markets, Nedbank, Old Mutual Wealth and Institutional Asset Management.  The 'Other' segment includes central activities. For all reporting periods, these businesses have been classified as continuing operations in the IFRS income statement and as core operations in determining the Group's adjusted operating profit (AOP).

For all reporting periods, Old Mutual Bermuda is classified as a continuing operation in the IFRS income statement, but as non-core in determining the Group's AOP. For the six months ended 30 June 2016, following the repayment of the majority of outstanding notes, interest payable in respect of Bermuda loan notes issued to Old Mutual plc are also included within non-core operations and excluded from AOP on the basis that it is no longer material.

For the six months ended 30 June 2016, the Group did not have any discontinued operations. For the year ended 31 December 2015 and six months ended 30 June 2015, items disclosed as discontinued operations related to payments in respect of the disposal of US Life in 2011. Further detail is included in note I1.

The Group's segmental results are analysed and reported on a basis consistent with the way that management and the Board of directors of Old Mutual plc assesses performance of the underlying businesses and allocates resources. Information is presented to the Board on a consolidated basis in pounds sterling (the presentation currency) and in the functional currency of each business.

Adjusted operating profit is one of the key measures reported to the Group's management and Board of directors for their consideration in the allocation of resources to, and the review of the performance of the segments. As appropriate to the business line, the Board reviews additional measures to assess the performance of each of the segments. These typically include sales, net client cash flows, funds under management, gross earned premiums, underwriting results, net interest income, non-interest revenue and credit losses.

Consistent with internal reporting, assets, liabilities, revenues and expenses that are not directly attributable to a particular segment are allocated between segments where appropriate and where there is a reasonable basis for doing so. The Group accounts for inter-segment revenues and transfers as if the transactions were with third parties at current market prices. There are no major trading activities between the segments.

The revenues generated in each reported segment can be seen in the analysis of profits and losses in note B3. The segmental information in notes B3 and B4, reflects the adjusted and IFRS measures of profit or loss and the assets and liabilities for each operating segment as provided to management and the Board of directors. There are no differences between the measurement of the assets and liabilities reflected in the primary statements and that reported for the segments.

The Group is primarily engaged in the following business activities from which it generates revenue: life assurance (premium income), asset management business (fee and commission income), banking (banking interest receivable and investment banking income) and property & casualty (premium income). Other revenue includes gains and losses on investment securities. An analysis of segment revenues and expenses and the Group's revenues and expenses is shown in note B3.

The principal lines of business from which each operating segment derives its revenues are as follows:

Core operations

Emerging Markets - life assurance, property & casualty, asset management and banking

Nedbank - banking, asset management and life assurance

Old Mutual Wealth - life assurance and asset management

Institutional Asset Management - asset management

Non-core operation

Old Mutual Bermuda - life assurance

B2: Gross earned premiums and deposits to investment contracts

			£m
Six months ended 30 June 2016	Emerging Markets	Old Mutual Wealth	Total
Life assurance - insurance contracts	595	70	665
Life assurance - investment contracts with discretionary    participation features	672	-	672
Property & casualty	366	-	366
Gross earned premiums	1,633	70	1,703
			£m
Six months ended 30 June 2015	Emerging Markets	Old Mutual Wealth	Total
Life assurance - insurance contracts	634	71	705
Life assurance - investment contracts with discretionary    participation features	540	-	540
Property & casualty	344	-	344
Gross earned premiums	1,518	71	1,589
			£m
Year ended 31 December 2015	Emerging Markets	Old Mutual Wealth	Total
Life assurance - insurance contracts	1,469	154	1,623
Life assurance - investment contracts with discretionary    participation features	1,221	-	1,221
Property & casualty	745	-	745
Gross earned premiums	3,435	154	3,589

B: Segment information continued

B3: Adjusted operating profit statement - segment information for the six months ended 30 June 2016

	Notes		Emerging Markets	Nedbank
Revenue
Gross earned premiums	B2		1,633	-
Outward reinsurance			(136)	-
Net earned premiums			1,497	-
Investment return (non-banking)			1,193	-
Banking interest and similar income			108	1,501
Banking trading, investment and similar income			4	96
Fee and commission income, and income from service activities			261	410
Other income			52	12
Total revenue2			3,115	2,019
Expenses
Claims and benefits (including change in insurance contract provisions)			(1,819)	-
Reinsurance recoveries			95	-
Net claims and benefits incurred			(1,724)	-
Change in investment contract liabilities			(386)	-
Credit impairment charges			(16)	(100)
Finance costs			(16)	-
Banking interest payable and similar expenses			(29)	(895)
Fee and commission expenses, and other acquisition costs			(136)	(4)
Change in third-party interest in consolidated funds			-	-
Other operating and administrative expenses			(533)	(655)
Income tax attributable to policyholder returns			(19)	-
Total expenses			(2,859)	(1,654)
Share of associated undertakings' and joint ventures' profit after tax			4	(20)
Profit on disposal of subsidiaries, associated undertakings and strategic    investments	C1(c)		-	-
Adjusted operating profit/(loss) before tax and non-controlling interests			260	345
Income tax expense	D1		(73)	(88)
Non-controlling interests			(6)	(123)
Adjusted operating profit/(loss) after tax and non-controlling interests			181	134
Adjusting items after tax and non-controlling interests	C1(a)		(22)	2
Profit/(loss) after tax from continuing operations			159	136
Loss from discontinued operations after tax	I1		-	-
Profit/(loss) after tax attributable to equity holders of the parent			159	136

¹        Consolidation adjustments comprise the consolidation of investment funds and eliminations of inter-segment transactions.

²        Included within total revenue prior to consolidation adjustments  are the following amounts derived from trading with other segments: Emerging Markets: £33 million (June 2015: £45 million; December 2015: £80 million); Nedbank: £4 million (June 2015: £5 million; December 2015: £3 million); Old Mutual Wealth: £1 million (June 2015: £1 million; December 2015: £3 million); Institutional Asset Management: £3 million (June 2015: £3 million; December 2015: £6 million); and non-core operation: £1 million (June 2015: £2 million; December 2015: £4 million).

³        Non-core operations for the six months ended 30 June 2016 comprises Old Mutual Bermuda. Old Mutual Bermuda's loss for the six months ended 30 June 2016 was £9 million, including interest payable in respect of Old Mutual Bermuda loan notes issued to Old Mutual plc of £1 million.

							£m
Old Mutual Wealth	Institutional Asset Management	Other	Consolidation adjustments1	Adjusted operating profit	Adjusting items  (note C1)	Non-core operations3	IFRS Income statement
70	-	-	-	1,703	-	-	1,703
(42)	-	-	-	(178)	-	-	(178)
28	-	-	-	1,525	-	-	1,525
1,499	-	33	255	2,980	(28)	(5)	2,947
-	-	-	-	1,609	-	-	1,609
-	-	-	-	100	-	-	100
526	222	-	(15)	1,404	(9)	-	1,395
7	1	-	(1)	71	-	1	72
2,060	223	33	239	7,689	(37)	(4)	7,648
(141)	-	-	-	(1,960)	-	-	(1,960)
112	-	-	2	209	-	-	209
(29)	-	-	2	(1,751)	-	-	(1,751)
(1,451)	-	-	-	(1,837)	-	-	(1,837)
-	-	-	-	(116)	-	-	(116)
-	(1)	(44)	-	(61)	23	-	(38)
-	-	-	-	(924)	-	-	(924)
(185)	(4)	-	(13)	(342)	12	-	(330)
-	-	-	(244)	(244)	-	-	(244)
(284)	(165)	(48)	16	(1,669)	(139)	(5)	(1,813)
(7)	-	-	-	(26)	26	-	-
(1,956)	(170)	(92)	(239)	(6,970)	(78)	(5)	(7,053)
-	5	-	-	(11)	-	-	(11)
-	-	-	-	-	24	-	24
104	58	(59)	-	708	(91)	(9)	608
(16)	(17)	13	-	(181)	(2)	-	(183)
-	(16)	-	-	(145)	4	-	(141)
88	25	(46)	-	382	(89)	(9)	284
(111)	14	28	-	(89)	89	-	-
(23)	39	(18)	-	293	-	(9)	284
-	-	-	-	-	-	-	-
(23)	39	(18)	-	293	-	(9)	284

B: Segment information continued

B3: Adjusted operating profit statement - segment information for the six months ended 30 June 2015

	Notes		Emerging Markets	Nedbank
Revenue
Gross earned premiums	B2		1,518	-
Outward reinsurance			(109)	-
Net earned premiums			1,409	-
Investment return (non-banking)			1,534	-
Banking interest and similar income			122	1,569
Banking trading, investment and similar income			5	105
Fee and commission income, and income from service activities			285	455
Other income			53	15
Total revenue			3,408	2,144
Expenses
Claims and benefits (including change in insurance contract provisions)			(1,688)	-
Reinsurance recoveries			82	-
Net claims and benefits incurred			(1,606)	-
Change in investment contract liabilities			(668)	-
Credit impairment charges			(7)	(127)
Finance costs			(6)	-
Banking interest payable and similar expenses			(55)	(910)
Fee and commission expenses, and other acquisition costs			(162)	(4)
Change in third-party interest in consolidated funds			-	-
Other operating and administrative expenses			(565)	(723)
Income tax attributable to policyholder returns			(16)	-
Total expenses			(3,085)	(1,764)
Share of associated undertakings' and joint ventures' profit after tax			10	24
Loss on disposal of subsidiaries, associated undertakings and strategic    investments	C1(c)		-	-
Adjusted operating profit/(loss) before tax and non-controlling interests			333	404
Income tax expense	D1		(95)	(100)
Non-controlling interests			(12)	(143)
Adjusted operating profit/(loss) after tax and non-controlling interests			226	161
Adjusting items after tax and non-controlling interests	C1(a)		(49)	6
Profit/(loss) after tax from continuing operations			177	167
Loss from discontinued operations after tax	I1		-	-
Profit/(loss) after tax attributable to equity holders of the parent			177	167

¹          Non-core operations relate to Old Mutual Bermuda. Old Mutual Bermuda's profit after tax for the six months ended 30 June 2015 was £4 million. Non-core operations also include £21 million relating to the disposal of US Life in 2011. Further information on discontinued operations is provided in note I1.

							£m
Old Mutual Wealth	Institutional Asset Management	Other	Consolidation adjustments1	Adjusted operating profit	Adjusting items (note C1)	Non-core operations2	IFRS Income statement
71	-	-	-	1,589	-	-	1,589
(42)	-	-	-	(151)	-	-	(151)
29	-	-	-	1,438	-	-	1,438
1,408	-	4	264	3,210	(41)	17	3,186
-	-	-	-	1,691	-	-	1,691
-	-	-	-	110	-	-	110
570	260	-	(20)	1,550	(13)	-	1,537
10	7	-	(19)	66	-	4	70
2,017	267	4	225	8,065	(54)	21	8,032
(41)	-	-	-	(1,729)	-	(9)	(1,738)
38	-	-	-	120	-	-	120
(3)	-	-	-	(1,609)	-	(9)	(1,618)
(1,367)	-	-	-	(2,035)	-	-	(2,035)
-	-	-	-	(134)	-	-	(134)
-	(1)	(42)	-	(49)	4	-	(45)
-	-	-	-	(965)	3	-	(962)
(287)	(3)	-	(45)	(501)	44	(2)	(459)
-	-	-	(207)	(207)	-	-	(207)
(190)	(183)	(29)	27	(1,663)	(259)	(6)	(1,928)
(19)	-	-	-	(35)	35	-	-
(1,866)	(187)	(71)	(225)	(7,198)	(173)	(17)	(7,388)
-	3	-	-	37	-	-	37
-	-	-	-	-	2	-	2
151	83	(67)	-	904	(225)	4	683
(19)	(25)	4	-	(235)	(8)	-	(243)
-	(12)	-	-	(167)	8	-	(159)
132	46	(63)	-	502	(225)	4	281
(174)	2	(10)	-	(225)	225	-	-
(42)	48	(73)	-	277	-	4	281
-	-	-	-	-	-	(21)	(21)
(42)	48	(73)	-	277	-	(17)	260

B: Segment information continued

B3: Adjusted operating profit statement - segment information for the year ended 31 December 2015

	Notes		Emerging Markets	Nedbank
Revenue
Gross earned premiums	B2		3,435	-
Outward reinsurance			(253)	-
Net earned premiums			3,182	-
Investment return (non-banking)			2,445	-
Banking interest and similar income			235	3,085
Banking trading, investment and similar income			5	208
Fee and commission income, and income from service activities			560	894
Other income			70	12
Total revenue			6,497	4,199
Expenses
Claims and benefits (including change in insurance contract provisions)			(3,294)	-
Reinsurance recoveries			184	-
Net claims and benefits incurred			(3,110)	-
Change in investment contract liabilities			(1,142)	-
Credit impairment charges			(62)	(245)
Finance costs			(15)	-
Banking interest payable and similar expenses			(93)	(1,833)
Fee and commission expenses, and other acquisition costs			(323)	(9)
Change in third-party interest in consolidated funds			-	-
Other operating and administrative expenses			(1,121)	(1,403)
Income tax attributable to policyholder returns			(30)	-
Total expenses			(5,896)	(3,490)
Share of associated undertakings' and joint ventures' profit after tax			14	45
Loss on disposal of subsidiaries, associated undertakings and strategic    investments	C1(c)		-	-
Adjusted operating profit/(loss) before tax and non-controlling interests			615	754
Income tax expense	D1		(173)	(180)
Non-controlling interests			(24)	(272)
Adjusted operating profit/(loss) after tax and non-controlling interests			418	302
Adjusting items after tax and non-controlling interests	C1(a)		(56)	7
Profit/(loss) after tax from continuing operations			362	309
Loss from discontinued operations after tax	I1		-	-
Profit/(loss) after tax attributable to equity holders of the parent			362	309

¹          Non-core operations relate to Old Mutual Bermuda. Old Mutual Bermuda's loss after tax for the year ended 31 December 2015 was £31 million. Non-core operations also include £21 million relating to the disposal of US Life in 2011. Further information on discontinued operations is provided in note I1.

							£m
Old Mutual Wealth	Institutional Asset Management	Other	Consolidation adjustments1	Adjusted operating profit	Adjusting items (note C1)	Discontinued and non-core operations2	IFRS Income statement
154	-	-	-	3,589	-	-	3,589
(82)	-	-	-	(335)	-	-	(335)
72	-	-	-	3,254	-	-	3,254
1,158	-	17	283	3,903	(73)	(35)	3,795
-	-	-	-	3,320	-	-	3,320
-	-	-	-	213	-	-	213
1,140	491	-	(39)	3,046	(19)	-	3,027
13	5	-	(21)	79	-	7	86
2,383	496	17	223	13,815	(92)	(28)	13,695
(169)	-	-	-	(3,463)	-	13	(3,450)
95	-	-	-	279	-	-	279
(74)	-	-	-	(3,184)	-	13	(3,171)
(1,061)	-	-	-	(2,203)	-	-	(2,203)
-	-	-	-	(307)	-	-	(307)
-	(2)	(83)	-	(100)	51	-	(49)
-	-	-	-	(1,926)	2	-	(1,924)
(416)	(6)	(4)	(57)	(815)	32	(3)	(786)
-	-	-	(208)	(208)	-	-	(208)
(524)	(347)	(92)	42	(3,445)	(301)	(13)	(3,759)
(1)	-	-	-	(31)	31	-	-
(2,076)	(355)	(179)	(223)	(12,219)	(185)	(3)	(12,407)
-	8	-	-	67	-	-	67
-	-	-	-	-	(36)	-	(36)
307	149	(162)	-	1,663	(313)	(31)	1,319
(43)	(30)	23	-	(403)	29	-	(374)
-	(33)	-	-	(329)	19	-	(310)
264	86	(139)	-	931	(265)	(31)	635
(222)	(20)	26	-	(265)	265	-	-
42	66	(113)	-	666	-	(31)	635
-	-	-	-	-	-	(21)	(21)
42	66	(113)	-	666	-	(52)	614

B: Segment information continued

B4: Statement of financial position - segment information at 30 June 2016

	Notes		Emerging Markets1	Nedbank
Assets
Goodwill and other intangible assets	G1		468	466
Mandatory reserve deposits with central banks			6	860
Property, plant and equipment			292	457
Investment property			1,506	2
Deferred tax assets			38	17
Investments in associated undertakings and joint ventures			77	409
Deferred acquisition costs			101	-
Reinsurers' share of policyholder liabilities	F2		189	6
Loans and advances	F1		1,029	35,574
Investments and securities			29,870	7,557
Current tax receivable			34	64
Trade, other receivables and other assets			873	717
Derivative financial instruments			211	1,017
Cash and cash equivalents			1,275	1,141
Assets held for sale	I2		17	-
Inter-segment funding - assets			-	-
Total assets			35,986	48,287
Liabilities
Long-term business insurance policyholder liabilities	F2		8,610	182
Investment contract liabilities	F2		20,397	679
Property & casualty liabilities	F2		425	-
Third-party interests in consolidated funds			-	-
Borrowed funds	F3		505	2,658
Provisions and accruals			112	-
Deferred revenue			22	-
Deferred tax liabilities			174	77
Current tax payable			88	19
Trade, other payables and other liabilities			2,505	1,471
Amounts owed to bank depositors			550	38,057
Derivative financial instruments			263	1,005
Liabilities held for sale	I2		-	-
Inter-segment funding - liabilities			-	-
Total liabilities			33,651	44,148
Net assets1			2,335	4,139
Equity
Equity attributable to equity holders of the parent			2,119	2,095
Non-controlling interests			216	2,044
Ordinary shares			216	1,731
Preferred securities			-	313
Total equity			2,335	4,139

¹        The net assets of Emerging Markets exclude £199 million (June 2015: £234 million; December 2015: £167 million) of investments held by policyholder funds in Group equity and debt instruments. These investments are in the Company's ordinary shares and in the subordinated liabilities and preferred securities issued by Nedbank.

²        Consolidation adjustments comprise the consolidation of investment funds and eliminations of inter-segment balances.

					£m
Old Mutual Wealth	Institutional Asset Management	Other	Non-core operation	Consolidation adjustments2	Total
1,450	958	-	-	-	3,342
-	-	-	-	-	866
21	24	-	-	-	794
-	-	-	-	-	1,508
10	245	-	1	-	311
1	30	10	-	-	527
599	29	-	-	-	729
2,863	-	-	-	-	3,058
198	-	-	-	-	36,801
45,286	95	454	-	5,734	88,996
38	-	-	-	-	136
1,382	124	116	8	148	3,368
-	-	55	19	239	1,541
761	49	351	80	321	3,978
6,081	-	-	-	-	6,098
-	-	903	90	(993)	-
58,690	1,554	1,889	198	5,449	152,053
391	-	-	-	-	9,183
47,867	-	-	97	-	69,040
-	-	-	-	-	425
-	-	-	-	6,585	6,585
-	38	1,103	-	(73)	4,231
36	3	7	-	-	158
232	-	-	-	-	254
139	1	17	-	-	408
-	80	20	-	-	207
1,431	277	271	4	(328)	5,631
-	-	-	-	-	38,607
-	25	31	2	258	1,584
5,853	-	-	-	-	5,853
790	97	106	-	(993)	-
56,739	521	1,555	103	5,449	142,166
1,951	1,033	334	95	-	9,887
1,951	664	334	95	-	7,258
-	369	-	-	-	2,629
-	369	-	-	-	2,316
-	-	-	-	-	313
1,951	1,033	334	95	-	9,887

B: Segment information continued

B4: Statement of financial position - segment information at 30 June 2015

	Notes		Emerging Markets	Nedbank
Assets
Goodwill and other intangible assets			408	437
Mandatory reserve deposits with central banks			4	804
Property, plant and equipment			294	394
Investment property			1,302	16
Deferred tax assets			56	16
Investments in associated undertakings and joint ventures			64	373
Deferred acquisition costs			99	-
Reinsurers' share of policyholder liabilities	F2		163	5
Loans and advances	F1		909	33,572
Investments and securities			28,563	6,447
Current tax receivable			16	24
Trade, other receivables and other assets			754	676
Derivative financial instruments			264	771
Cash and cash equivalents			1,417	1,660
Assets held for sale			212	-
Inter-segment funding - assets			-	-
Total assets			34,525	45,195
Liabilities
Long-term business insurance policyholder liabilities	F2		8,746	211
Investment contract liabilities	F2		19,159	638
Property & casualty liabilities	F2		394	-
Third-party interests in consolidated funds			-	-
Borrowed funds	F3		489	2,368
Provisions and accruals			167	1
Deferred revenue			19	1
Deferred tax liabilities			204	33
Current tax payable			91	13
Trade, other payables and other liabilities			2,377	1,789
Amounts owed to bank depositors			429	35,571
Derivative financial instruments			375	786
Liabilities held for sale	I2		-	-
Inter-segment funding - liabilities			-	-
Total liabilities			32,450	41,411
Net assets			2,075	3,784
Equity
Equity attributable to equity holders of the parent			1,866	1,942
Non-controlling interests			209	1,842
Ordinary shares			209	1,570
Preferred securities			-	272
Total equity			2,075	3,784

					£m
Old Mutual Wealth	Institutional Asset Management	Other	Non-core operation	Consolidation adjustments	Total
1,668	831	-	-	-	3,344
-	-	-	-	-	808
20	18	-	-	-	726
-	-	-	-	-	1,318
7	167	-	1	-	247
-	23	10	-	-	470
686	19	-	-	-	804
2,226	-	-	-	-	2,394
174	-	-	-	-	34,655
47,176	45	397	293	4,112	87,033
55	-	-	-	-	95
710	117	107	442	132	2,938
-	-	67	18	41	1,161
751	129	401	21	655	5,034
902	-	-	-	-	1,114
64	-	865	-	(929)	-
54,439	1,349	1,847	775	4,011	142,141
258	-	-	636	-	9,851
48,953	-	-	36	-	68,786
-	-	-	-	-	394
-	-	-	-	5,678	5,678
-	92	680	-	(63)	3,566
35	2	23	-	-	228
271	-	-	-	-	291
221	-	18	-	-	476
23	12	30	-	-	169
1,154	370	148	10	(675)	5,173
-	-	-	-	-	36,000
-	-	-	-	-	1,161
833	-	-	-	-	833
763	-	166	-	(929)	-
52,511	476	1,065	682	4,011	132,606
1,928	873	782	93	-	9,535
1,928	577	782	93	-	7,188
-	296	-	-	-	2,347
-	296	-	-	-	2,075
-	-	-	-	-	272
1,928	873	782	93	-	9,535

B: Segment information continued

B4: Statement of financial position - segment information at 31 December 2015

	Notes		Emerging Markets	Nedbank
Assets
Goodwill and other intangible assets	G1		415	378
Mandatory reserve deposits with central banks			5	711
Property, plant and equipment			275	385
Investment property			1,232	1
Deferred tax assets			47	10
Investments in associated undertakings and joint ventures			60	420
Deferred acquisition costs			87	-
Reinsurers' share of policyholder liabilities	F2		150	4
Loans and advances	F1		912	29,873
Investments and securities			24,983	5,777
Current tax receivable			14	46
Trade, other receivables and other assets			759	495
Derivative financial instruments			386	1,335
Cash and cash equivalents			1,088	1,001
Assets held for sale			84	-
Inter-segment funding - assets			-	-
Total assets			30,497	40,436
Liabilities
Long-term business insurance policyholder liabilities	F2		7,262	159
Investment contract liabilities	F2		16,943	482
Property & casualty liabilities	F2		341	-
Third-party interests in consolidated funds			-	-
Borrowed funds	F3		449	1,971
Provisions and accruals			143	-
Deferred revenue			20	-
Deferred tax liabilities			183	45
Current tax payable			73	18
Trade, other payables and other liabilities			2,006	1,036
Amounts owed to bank depositors			518	31,810
Derivative financial instruments			558	1,474
Liabilities held for sale	I2		-	-
Inter-segment funding - liabilities			-	-
Total liabilities			28,496	36,995
Net assets			2,001	3,441
Equity
Equity attributable to equity holders of the parent			1,805	1,710
Non-controlling interests			196	1,731
Ordinary shares			196	1,459
Preferred securities			-	272
Total equity			2,001	3,441

					£m
Old Mutual Wealth	Institutional Asset Management	Other	Non-core operations	Consolidation adjustments	Total
1,620	863	-	-	-	3,276
-	-	-	-	-	716
19	21	-	-	-	700
-	-	-	-	-	1,233
8	218	-	1	-	284
1	23	10	-	-	514
673	24	-	-	-	784
2,507	-	-	-	-	2,661
180	-	-	-	-	30,965
48,157	80	467	-	3,137	82,601
28	-	-	-	-	88
618	119	102	16	(102)	2,007
-	-	55	17	1,283	3,076
792	92	527	26	994	4,520
4	35	-	-	-	123
-	-	860	80	(940)	-
54,607	1,475	2,021	140	4,372	133,548
293	-	-	-	-	7,714
50,344	-	-	85	-	67,854
-	-	-	-	-	341
-	-	-	-	4,661	4,661
-	61	1,098	-	(55)	3,524
34	3	19	-	-	199
254	-	-	-	-	274
172	-	17	-	-	417
13	59	23	-	-	186
799	297	212	6	(569)	3,787
-	-	-	-	-	32,328
-	6	4	-	1,275	3,317
-	12	-	-	-	12
748	99	93	-	(940)	-
52,657	537	1,466	91	4,372	124,614
1,950	938	555	49	-	8,934
1,950	611	555	49	-	6,680
-	327	-	-	-	2,254
-	327	-	-	-	1,982
-	-	-	-	-	272
1,950	938	555	49	-	8,934

C: Other key performance information 

C1: Operating profit adjusting items

(a) Summary of adjusting items for determination of adjusted operating profit (AOP)

In determining the AOP of the Group for core operations, certain adjustments are made to profit before tax to reflect the directors' view of the underlying long-term performance of the Group. The following table shows an analysis of those adjustments from AOP to profit before and after tax.

		£m
	Notes	Six months ended 30 June 2016	Six months ended 30 June 2015	Year ended 31 December 2015
(Expense)/income
Goodwill impairment and impact of acquisition accounting	C1(b)	(90)	(171)	(167)
Net profit/(loss) on disposal of subsidiaries, associated undertakings and    strategic investments	C1(c)	24	2	(36)
Short-term fluctuations in investment return	C1(d)	(23)	(15)	(42)
Investment return adjustment for Group equity and debt instruments held in    life funds	C1(e)	(5)	(26)	(31)
Dividends declared to holders of perpetual preferred callable securities	C1(f)	9	15	31
Institutional Asset Management equity plans	C1(g)	2	(6)	(9)
Credit-related fair value gains/(losses) on Group debt instruments	C1(h)	14	(19)	7
Old Mutual Wealth business transformation costs	C1(i)	(48)	(40)	(97)
Total adjusting items		(117)	(260)	(344)
Tax on adjusting items	D1(d)	24	27	60
Non-controlling interest on adjusting items		4	8	19
Total adjusting items after tax and non-controlling interests		(89)	(225)	(265)

(b) Goodwill impairment and impact of acquisition accounting

When applying acquisition accounting, deferred acquisition costs and deferred revenue existing at the point of acquisition are not recognised under IFRS. These are reversed on acquisition in the statement of financial position and replaced by goodwill, other intangible assets and the value of the acquired present value of in-force business (acquired PVIF). In determining AOP, the Group recognises deferred revenue, acquisition costs and deferred revenue in relation to policies sold by acquired businesses pre-acquisition. The Group excludes the impairment of goodwill, the amortisation and impairment of acquired other intangible assets and acquired PVIF as well as the movements in certain acquisition date provisions. Costs incurred on completed acquisitions are also excluded from AOP. If the intangible assets recognised as a result of a business combination are subsequently impaired, this is excluded from AOP. The effect of these adjustments to determine AOP are summarised below:

					£m
Six months ended 30 June 2016		Emerging Markets	Old Mutual Wealth	Institutional Asset Management	Total
Impairment of goodwill and other intangible assets		-	(44)	-	(44)
Amortisation of acquired PVIF		(2)	(19)	-	(21)
Amortisation of acquired deferred costs and revenue		-	3	-	3
Amortisation of other acquired intangible assets		(3)	(20)	-	(23)
Acquisition costs		-	(7)	-	(7)
Deferred consideration and other acquisition date provisions		2	-	-	2
		(3)	(87)	-	(90)
					£m
Six months ended 30 June 2015		Emerging Markets	Old Mutual Wealth	Institutional Asset Management	Total
Impairment of goodwill and other intangible assets		-	(94)	-	(94)
Amortisation of acquired PVIF		(5)	(27)	-	(32)
Amortisation of acquired deferred costs and revenue		-	7	-	7
Amortisation of other acquired intangible assets		(7)	(26)	-	(33)
Acquisition costs		(3)	(9)	-	(12)
Deferred consideration		-	(7)	-	(7)
		(15)	(156)	-	(171)
					£m
Year ended 31 December 2015		Emerging Markets	Old Mutual Wealth	Institutional Asset Management	Total
Impairment of goodwill and other intangible assets		-	-	(23)	(23)
Amortisation of acquired PVIF		(7)	(51)	-	(58)
Amortisation of acquired deferred costs and revenue		-	13	-	13
Amortisation of other acquired intangible assets		(13)	(56)	-	(69)
Acquisition costs		(4)	(10)	-	(14)
Deferred consideration		-	(16)	-	(16)
		(24)	(120)	(23)	(167)

(c) Net profit/(loss) on disposal of subsidiaries, associated undertakings and strategic investments

The net profit/(loss) on disposal of subsidiaries, associated undertakings and strategic investments is analysed below:

			£m
	Six months ended 30 June 2016	Six months ended  30 June     2015	Year ended 31 December 2015
Emerging Markets	-	-	15
Old Mutual Wealth	-	1	(52)
Institutional Asset Management	14	1	1
Old Mutual plc	10	-	-
Net profit/(loss) on disposal of subsidiaries, associated undertakings    and strategic investments	24	2	(36)

Emerging Markets

Prior period transaction

On 10 December 2015, Old Mutual Investment Group, a subsidiary of the Group, acquired an additional 50% stake in African Infrastructure Investment Managers (Pty) Limited (AIIM). The accounting related to the step up in ownership from 50% to 100% effectively involved a simultaneous sale of 50% of the business, followed by an acquisition of the fair value of 100% of the business. The profit of £15 million realised in the financial year ended 31 December 2015 represents the difference between the fair value of the initial 50% and the carrying amount of the investment in AIIM at 10 December 2015.

Old Mutual Wealth

Prior period transactions

On 2 February 2015, the Group completed the sale of Skandia Luxembourg and Skandia France. For the year ended 31 December 2015, the Group recognised a loss on disposal of £1 million (six months ended 30 June 2015: profit of £1 million), which comprised a loss on disposing the net assets of the sold business of £31 million (six months ended 30 June 2015: loss of £29 million) and, for both the year ended 31 December 2015 and the six months ended 30 June 2015, a gain of £30 million relating to amounts recycled from foreign currency translation reserve.

On 30 September 2015, the Group completed the sale of its Switzerland business, Skandia Leben AG. The Group recognised a loss on disposal of £51 million, which comprised a loss on disposing the net assets of the sold business of £91 million and a gain of £40 million relating to amounts recycled from the foreign currency translation reserve.

Institutional Asset Management

Current period transaction

On 31 May 2016, the Group completed the sale of its interest in Rogge Global Partners Limited (Rogge), a fixed income asset manager, to Allianz Global Investors GmbH. The sales proceeds received are subject to adjustment as amounts could either be clawed back or future amounts become payable based on Rogge's future performance. A profit on disposal of £12 million has been recognised in the current period reflecting the director's current assessment of the likely final amount recoverable.

Current period and prior transactions

The Group received additional income of £2 million (six months ended 30 June 2015: £1 million; year ended 31 December 2015: £1 million) relating to deferred consideration linked to earnout conditions in respect of Institutional Asset Management affiliates disposed in prior years.

Old Mutual plc

Current period transactions

During the period, Old Mutual plc received £10 million from Skandia Liv in respect of various matters relating to the completion of the separation of the Skandia Nordic business from the Group.

C: Other key performance information continued

C1: Operating profit adjusting items continued

(d) Short-term fluctuations in investment return

Profit before tax, as disclosed in the consolidated IFRS income statement, includes actual investment returns earned on the shareholder assets of the Group's life assurance and property & casualty businesses. AOP is stated after recalculating shareholder asset investment returns based on a long-term investment return rate. The difference between the actual and the long-term investment returns is referred to as the short-term fluctuation in investment return.

Long-term rates of return are based on achieved rates of return appropriate to the underlying asset base, adjusted for current inflation expectations, default assumptions, costs of investment management and consensus economic investment forecasts. The underlying rates are principally derived with reference to 10-year government bond rates, cash and money market rates and an explicit equity risk premium for South African businesses. The rates set out below reflect the apportionment of underlying investments in cash deposits, money market instruments and equity assets. Long-term rates of return are reviewed annually by the Board. The Board's review of the long-term rates of return seeks to ensure that the returns credited to AOP are consistent with the actual returns expected to be earned over the long-term.

For Emerging Markets, the return is applied to an average value of investible shareholders' assets, adjusted for net fund flows. For Old Mutual Wealth, the return is applied to average investible assets.

			%
Long-term investment rates	Six months  ended 30 June 2016	Six months ended  30 June 2015	Year ended 31 December 2015
Emerging Markets
Mutual & Federal1	7.4	7.4	7.4
Old Mutual South Africa	8.0	8.0	8.0
Rest of Africa	8.5	8.5	8.5
Old Mutual Wealth	1.0	1.0	1.0

¹   The long-term investment rate for Mutual & Federal relates solely to its South African business.

Analysis of short-term fluctuations in investment return

	£m
Six months ended 30 June 2016	Emerging Markets	Old Mutual Wealth	Other	Total
Actual shareholder investment return	34	10	5	49
Less: Long-term investment return	59	3	10	72
Short-term fluctuations in investment return	(25)	7	(5)	(23)
	£m
Six months ended 30 June 2015	Emerging Markets	Old Mutual Wealth	Other	Total
Actual shareholder investment return	57	(2)	8	63
Less: Long-term investment return	64	3	11	78
Short-term fluctuations in investment return	(7)	(5)	(3)	(15)
	£m
Year ended 31 December 2015	Emerging Markets	Old Mutual Wealth	Other	Total
Actual shareholder investment return	88	8	12	108
Less: Long-term investment return	124	5	21	150
Short-term fluctuations in investment return	(36)	3	(9)	(42)

(e) Investment return adjustment for Group equity and debt instruments held in policyholder funds

AOP includes investment returns on policyholder investments in Group equity and debt instruments held by the Group's life funds. These include investments in the Company's ordinary shares and the subordinated liabilities and ordinary shares issued by the Group. These investment returns are eliminated within the consolidated income statement in arriving at profit before tax, but are included in AOP. This ensures consistency of treatment with the measures in the related policyholder liability. During the six months ended 30 June 2016, the investment return adjustment increased AOP by £5 million (six months ended 30 June 2015: £26 million; year ended 31 December 2015: £31 million).

(f) Dividends declared to holders of perpetual preferred callable securities

Dividends declared to the holders of the Group's perpetual preferred callable securities on an AOP basis were £9 million for the six months ended 30 June 2016 (six months ended 30 June 2015: £15 million; year ended 31 December 2015: £31 million). For the purpose of determining AOP, these are recognised in finance costs on an accrual basis. In accordance with IFRS, the total cash distribution is recognised directly in equity.

(g) Institutional Asset Management equity plans

Institutional Asset Management has a number of long-term incentive arrangements with senior employees in its asset management affiliates.

As part of the incentive schemes in the Institutional Asset Management business, the Group has granted put options over the equity of certain affiliates to senior affiliate employees. The impact of revaluing these instruments in accordance with IFRS, is excluded from AOP. At 30 June 2016, these instruments were revalued, the impact of which was a gain of £2 million (six months ended 30 June 2015: loss of £6 million; year ended 31 December 2015: loss of £9 million).

(h) Credit-related fair value losses on Group debt instruments

The widening of the credit spread on the Group's debt instruments can cause the market value of these instruments to decrease, resulting in gains being recognised in profit or loss. Conversely, if the credit spread narrows the market value of debt instruments will increase causing losses to be recognised in the consolidated income statement. In the directors' view, such movements are not reflective of the underlying performance of the Group and will reverse over time. Therefore they have been excluded from AOP.  For the six months ended 30 June 2016, due to widening of credit spreads, a net gain of £14 million was recognised (six months ended 30 June 2015: net loss of £19 million; year ended 31 December 2015: net gain of £7 million).

(i) Old Mutual Wealth restructuring expenditure

In 2013, Old Mutual Wealth UK business embarked on a significant programme to develop new platform capabilities and to outsource UK business administration. This will involve replacing many aspects of the existing UK platform, and on completion certain elements of service provision will be migrated to International Financial Data Services (IFDS) under a long-term outsourcing agreement. The cost of developing the new technology typically cannot be capitalised, hence these costs and the costs of decommissioning existing technology and migrating of services to IFDS are excluded from AOP. Only costs that are directly attributable to the programme are excluded. For the six months ended 30 June 2016, these costs totalled £48 million (six months ended 30 June 2015: £40 million; year ended 31 December 2015: £97 million).

 

C2: Earnings and earnings per share

					Pence
	Source of guidance	Notes	Six months ended 30 June 2016	Six months ended 30 June 2015	Year ended 31 December 2015
Basic earnings per share	IFRS	C2(a)	5.7	5.4	12.7
Diluted basic earnings per share	IFRS	C2(b)	5.6	5.0	12.2
Adjusted operating earnings per share	Group policy	C2(c)	8.0	10.3	19.3
Headline earnings per share (Gross of tax)	JSE Listing Requirements	C2(d)	6.1	7.4	13.9
Headline earnings per share (Net of tax)	JSE Listing Requirements	C2(d)	6.2	7.4	13.9
Diluted headline earnings per share (Gross of tax)	JSE Listing Requirements	C2(d)	6.0	6.9	13.3
Diluted headline earnings per share (Net of tax)	JSE Listing Requirements	C2(d)	6.0	6.9	13.3

C: Other key performance information continued

C2: Earnings and earnings per share continued

(a) Basic earnings per share

Basic earnings per share is calculated by dividing the profit for the financial period attributable to ordinary equity shareholders of the parent by the weighted average number of ordinary shares in issue during the year excluding own shares held in policyholder funds, Employee Share Ownership Plan Trusts (ESOP), Black Economic Empowerment trusts and other related undertakings.

The table below reconciles the profit attributable to equity holders of the parent to profit attributable to ordinary equity holders:

				£m
		Six months ended 30 June 2016	Six months ended 30 June 2015	Year ended 31 December 2015
Profit for the financial period attributable to equity holders of the parent from    continuing operations		284	281	635
Loss for the financial period attributable to equity holders of the parent from    discontinued operations		-	(21)	(21)
Profit for the financial period attributable to equity holders of the parent		284	260	614
Dividends paid to holders of perpetual preferred callable securities,    net of tax credits		(16)	(14)	(24)
Profit attributable to ordinary equity holders		268	246	590

Total dividends paid to holders of perpetual preferred callable securities of £16 million for the six months ended 30 June 2016 (six months ended 30 June 2015: £14 million; year ended 31 December 2015: £24 million) are stated net of tax credits of £1 million (six months ended 30 June 2015: £3 million; year ended 31 December 2015: £6 million).

The table below summarises the calculation of the weighted average number of ordinary shares for the purposes of calculating basic earnings per share:

				Millions
		Six months ended 30 June 2016	Six months ended  30 June 2015	Year ended 31 December 2015
Weighted average number of ordinary shares in issue		4,929	4,920	4,924
Shares held in charitable foundations and trusts		(21)	(6)	(13)
Shares held in ESOP and similar trusts		(135)	(59)	(98)
Adjusted weighted average number of ordinary shares		4,773	4,855	4,813
Shares held in life funds		(80)	(80)	(81)
Shares held in Black Economic Empowerment trusts		(7)	(177)	(91)
Weighted average number of ordinary shares used to calculate    basic earnings per share		4,686	4,598	4,641
Basic earnings per ordinary share (pence)		5.7	5.4	12.7

(b) Diluted basic earnings per share

Diluted basic EPS recognises the dilutive impact of shares and options held in ESOP and similar trusts and Black Economic Empowerment trusts, to the extent they have value, in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the full period.

The table below reconciles the profit attributable to ordinary equity holders to diluted profit attributable to ordinary equity holders and summarises the calculation of weighted average number of shares for the purpose of calculating diluted basic earnings per share:

	Notes	Six months ended 30 June 2016	Six months ended 30 June 2015	Year ended 31 December 2015
Profit attributable to ordinary equity holders (£m)		268	246	590
Dilution effect on profit relating to share options issued by subsidiaries (£m)		(2)	(5)	(7)
Diluted profit attributable to ordinary equity holders (£m)		266	241	583
Weighted average number of ordinary shares (millions)	C2(a)	4,686	4,598	4,641
Adjustments for share options held by ESOP and similar trusts (millions)		68	36	47
Adjustments for shares held in Black Economic Empowerment trusts (millions)		7	177	91
Weighted average number of ordinary shares used to calculate    diluted basic earnings per share (millions)		4,761	4,811	4,779
Diluted basic earnings per ordinary share (pence)		5.6	5.0	12.2

(c) Adjusted operating earnings per share

The following table presents a reconciliation of profit for the financial period to adjusted operating profit after tax attributable to ordinary equity holders and summarises the calculation of adjusted operating earnings per share:

		+
	Notes	Six months ended 30 June 2016	Six months ended 30 June 2015	Year ended 31 December 2015
Profit for the financial period attributable to equity holders of the parent		284	260	614
Adjusting items	C1(a)	117	260	344
Tax on adjusting items		(24)	(27)	(60)
Non-core operations	B3	9	(4)	31
Loss from discontinued operations	I1	-	21	21
Non-controlling interest on adjusting items		(4)	(8)	(19)
Adjusted operating profit after tax attributable to ordinary equity    holders (£m)		382	502	931
Adjusted weighted average number of ordinary shares used to    calculate adjusted operating earnings per share (millions)	C2(a)	4,773	4,855	4,813
Adjusted operating earnings per share (pence)		8.0	10.3	19.3

C: Other key performance information continued

C2: Earnings and earnings per share continued

(d) Headline earnings per share

The Group is required to calculate headline earnings per share (HEPS) in accordance with the JSE Limited (JSE) Listing Requirements, determined by reference to the South African Institute of Chartered Accountants' circular 02/2015 'Headline Earnings'. The table below sets out a reconciliation of basic EPS and HEPS in accordance with that circular. Disclosure of HEPS is not a requirement of IFRS, but it is a commonly used measure of earnings in South Africa. The table below reconciles the profit for the financial year attributable to equity holders of the parent to headline earnings and summarises the calculation of basic HEPS:

		Six months ended 30 June 2016		Six months ended 30 June 2015		Year ended 31 December 2015
	Notes	Gross	Net	Gross	Net	Gross	Net
Profit for the financial period attributable to equity holders    of the parent		284	284	260	260	614	614
Dividends paid to holders of perpetual preferred    callable securities		(16)	(16)	(14)	(14)	(24)	(24)
Profit attributable to ordinary equity holders		268	268	246	246	590	590
Adjustments:
Impairments of goodwill and other intangible assets		44	44	94	94	23	23
Loss on disposal of subsidiaries, associated undertakings    and strategic investments		(24)	(23)	(2)	(2)	36	35
Realised gains (net of impairments) on available-for-sale    financial assets		-	-	-	-	(5)	(5)
Headline earnings		288	289	338	338	644	643
Dilution effect on earnings relating to share options issued    by subsidiaries		(2)	(2)	(5)	(5)	(7)	(7)
Diluted headline earnings  (£m)		286	287	333	333	637	636
Weighted average number of ordinary shares (millions)	C2(a)	4,686	4,686	4,598	4,598	4,641	4,641
Diluted weighted average number of ordinary shares    (millions)	C2(b)	4,761	4,761	4,811	4,811	4,779	4,779
Headline earnings per share (pence)		6.1	6.2	7.4	7.4	13.9	13.9
Diluted headline earnings per share (pence)		6.0	6.0	6.9	6.9	13.3	13.3

C3: Dividends

				£m
	Ordinary dividend payment date	Six months ended 30 June 2016	Six months ended 30 June 2015	Year ended 31 December 2015
2014 Final dividend paid - 6.25p per 11 3/7p ordinary share	29 May 2015	-	296	296
2015 Interim dividend paid - 2.65p per 11 3/7p ordinary share	30 October 2015	-	-	126
2015 Second interim dividend paid - 6.25p per 11 3/7p ordinary share	26 April 2016	299	-	-
Dividends to ordinary equity holders		299	296	422
Dividends paid to holders of perpetual preferred callable securities		17	17	30
Dividend payments for the period		316	313	452

Final and interim dividends paid to ordinary equity holders are calculated using the number of shares in issue at the record date less own shares held in ESOP and similar trusts, life funds of Group entities, Black Economic Empowerment trusts and related undertakings.

As a consequence of the exchange control arrangements in place in certain African territories, dividends to ordinary equity holders on the branch registers of those countries (or, in the case of Namibia, the Namibian section of the principal register) are settled through Dividend Access Trusts established for that purpose.

An interim dividend of 2.67 pence (or its equivalent in other applicable currencies) per ordinary share in the Company has been recommended by the directors in relation to the six months ended 30 June 2016. The interim dividend will be paid on 28 October 2016 to shareholders on the registers at the close of business on 23 September 2016. The Company is not offering a scrip dividend alternative.

In March 2016, £17 million was declared and paid to holders of perpetual preferred callable securities (March 2015: £17 million; November 2015: £13 million).

D: Other income statement notes

D1: Income tax expense

(a) Analysis of total income tax expense

The total income tax expense for the year comprises:

			£m
	Six months ended 30 June  2016	Six months ended 30 June  2015	Year ended 31 December 2015
Current tax
United Kingdom	11	24	33
Overseas tax
- South Africa	182	155	272
- Rest of Africa	4	11	19
- Europe	6	9	17
- Rest of the world	14	18	16
Withholding taxes	4	6	11
Adjustments to current tax in respect of prior years	1	(1)	(1)
Total current tax	222	222	367
Deferred tax
Origination and reversal of temporary differences	(39)	21	23
Effect on deferred tax of changes in tax rates	(1)	-	(8)
Adjustments to deferred tax in respect of prior years	1	-	(8)
Total deferred tax	(39)	21	7
Total income tax expense	183	243	374

(b) Reconciliation of total income tax expense

The income tax expense charged to profit or loss differs from the income tax expense that would apply if all of the Group's profits, from the different tax jurisdictions, had been taxed at the UK standard corporation tax rate. The difference in the effective rate is explained below:

			£m
	Six months ended 30 June 2016	Six months ended 30 June 2015	Year ended 31 December 2015
Profit before tax	608	683	1,319
Tax at UK standard rate of 20% (2015: 20.25%)	122	138	267
Different tax rate or basis on overseas operations	54	60	118
Untaxed and low taxed income	(57)	(35)	(82)
Disallowable expenses	35	47	46
Adjustments to current tax in respect of prior years	1	-	(1)
Net movement on deferred tax assets not recognised	7	3	7
Effect on deferred tax of changes in tax rates	(1)	-	(8)
Adjustments to deferred tax in respect of prior years	1	-	(8)
Withholding taxes	-	2	5
Income tax attributable to policyholder returns	21	28	25
Other	-	-	5
Total income tax expense	183	243	374

D: Other income statement notes continued

D1: Income tax expense continued

(c) Income tax relating to components of other comprehensive income

The total income tax expense relating to items recognised in other comprehensive income for the year comprises of the following:

			£m
	Six months ended 30 June 2016	Six months ended 30 June 2015	Year ended 31 December 2015
Measurement gains on defined benefit plans	-	-	1
Property revaluation	-	-	3
Share-based-payments	(6)	-	-
Income tax on items that will not be reclassified subsequently to profit or loss	(6)	-	4
Income tax expense relating to components of other comprehensive income	(6)	-	4

(d) Reconciliation of income tax expense in the IFRS income statement to income tax on adjusted operating profit

			£m
	Six months ended 30 June 2016	Six months ended 30 June 2015	Year ended 31 December 2015
Income tax expense	183	243	374
Tax on adjusting items
Goodwill impairment and impact of acquisition accounting	7	17	20
(Loss)/profit on disposal of subsidiaries, associates and strategic investments	(1)	-	1
Short-term fluctuations in investment return	11	(2)	22
Tax on dividends declared to holders of perpetual preferred callable securities    recognised in equity	(1)	(3)	(6)
Institutional Asset Management equity plans	(1)	7	5
Old Mutual Wealth business transformation costs	9	8	18
Total tax on adjusting items	24	27	60
Income tax attributable to policyholders returns	(26)	(35)	(31)
Income tax on adjusted operating profit	181	235	403

E: Financial assets and liabilities

E1: Categories of financial instruments

The analysis of assets and liabilities into their categories as defined in IAS 39 'Financial Instruments: Recognition and Measurement' is set out in the following table. Assets and liabilities of a non-financial nature, or financial assets and liabilities that are specifically excluded from the scope of IAS 39, are reflected in the non-financial assets and liabilities category.

All gains and losses on measuring the financial assets and liabilities at each reporting date are included in the determination of profit or loss for the year, with the exception of unrealised gains or losses on financial assets classified as available for sale, which are recognised in other comprehensive income.

At 30 June 2016								£m
Measurement basis		Fair value (note E3)			Amortised cost
	Total	Held-for-trading	Designated	Available-for-sale financial assets	Held-to-maturity investments	Loans and receivables	Financial liabilities amortised cost	Non-financial assets and liabilities
Assets
Mandatory reserve deposits with    central banks	866	-	-	-	-	866	-	-
Investments in associated    undertakings and joint ventures1	527	-	74	-	-	-	-	453
Reinsurers' share of policyholder   liabilities	3,058	-	2,596	-	-	6	-	456
Loans and advances	36,801	1,784	3,482	2	-	31,533	-	-
Investments and securities	88,996	1,241	84,085	791	2,879	-	-	-
Trade, other receivables and    other assets	3,368	282	-	-	-	1,701	-	1,385
Derivative financial instruments	1,541	1,541	-	-	-	-	-	-
Cash and cash equivalents	3,978	-	-	-	-	3,978	-	-
Total assets that include financial    instruments	139,135	4,848	90,237	793	2,879	38,084	-	2,294
Total other non-financial assets	12,918	-	-	-	-	-	-	12,918
Total assets	152,053	4,848	90,237	793	2,879	38,084	-	15,212
Liabilities
Long-term business insurance    policyholder liabilities	9,183	-	-	-	-	-	-	9,183
Investment contract liabilities	69,040	-	60,364	-	-	-	-	8,676
Third-party interest in    consolidation of funds	6,585	-	6,585	-	-	-	-	-
Borrowed funds	4,231	-	868	-	-	-	3,363	-
Trade, other payables and    other liabilities	5,631	823	667	-	-	-	2,237	1,904
Amounts owed to bank depositors	38,607	5,385	3,300	-	-	-	29,922	-
Derivative financial instruments	1,584	1,584	-	-	-	-	-	-
Total liabilities that include    financial instruments	134,861	7,792	71,784	-	-	-	35,522	19,763
Total other non-financial liabilities	7,305	-	-	-	-	-	-	7,305
Total liabilities	142,166	7,792	71,784	-	-	-	35,522	27,068

¹        Investments in associated undertakings and joint ventures classified as non-financial assets and liabilities are equity accounted.

E: Financial assets and liabilities continued

E1: Categories of financial instruments continued

At 30 June 2015								£m
Measurement basis		Fair value (note E3)			Amortised cost
	Total	Held-for-trading	Designated	Available-for-sale financial assets	Held-to-maturity investments	Loans and receivables	Financial liabilities amortised cost	Non-financial assets and liabilities
Assets
Mandatory reserve deposits with    central banks	808	-	-	-	-	808	-	-
Investments in associated    undertakings and joint ventures1	470	-	54	-	-	-	-	416
Reinsurers' share of policyholder   liabilities	2,394	-	2,082	-	-	5	-	307
Loans and advances	34,655	2,017	3,425	2	-	29,211	-	-
Investments and securities	87,033	953	82,866	647	2,512	55	-	-
Trade, other receivables and    other assets	2,938	71	288	-	-	1,565	-	1,014
Derivative financial instruments	1,161	1,161	-	-	-	-	-	-
Cash and cash equivalents	5,034	-	-	-	-	5,034	-	-
Total assets that include financial    instruments	134,493	4,202	88,715	649	2,512	36,678	-	1,737
Total other non-financial assets	7,648	-	-	-	-	-	-	7,648
Total assets	142,141	4,202	88,715	649	2,512	36,678	-	9,385
Liabilities
Long-term business insurance    policyholder liabilities	9,851	-	-	-	-	-	-	9,851
Investment contract liabilities	68,786	-	60,905	-	-	-	-	7,881
Third-party interest in    consolidation of funds	5,678	-	5,678	-	-	-	-	-
Borrowed funds	3,566	-	802	-	-	-	2,764	-
Trade, other payables and    other liabilities	5,173	704	430	-	-	-	2,395	1,644
Amounts owed to bank depositors	36,000	4,565	2,585	-	-	-	28,850	-
Derivative financial instruments	1,161	1,161	-	-	-	-	-	-
Total liabilities that include    financial instruments	130,215	6,430	70,400	-	-	-	34,009	19,376
Total other non-financial liabilities	2,391	-	-	-	-	-	-	2,391
Total liabilities	132,606	6,430	70,400	-	-	-	34,009	21,767

¹        Investments in associated undertakings and joint ventures classified as non-financial assets and liabilities are equity accounted.

At 31 December 2015								£m
Measurement basis		Fair value (note E3)			Amortised cost
	Total	Held-for-trading	Designated	Available-for-sale financial assets	Held-to-maturity investments	Loans and receivables	Financial liabilities amortised cost	Non-financial assets and liabilities
Assets
Mandatory reserve deposits with    central banks	716	-	-	-	-	716	-	-
Investments in associated    undertakings and joint ventures1	514	-	51	-	-	-	-	463
Reinsurers' share of policyholder   liabilities	2,661	-	2,328	-	-	4	-	329
Loans and advances	30,965	1,491	3,035	2	-	26,437	-	-
Investments and securities	82,601	883	78,723	731	2,264	-	-	-
Trade, other receivables and    other assets	2,007	182	-	-	-	1,179	-	646
Derivative financial instruments	3,076	3,076	-	-	-	-	-	-
Cash and cash equivalents	4,520	-	-	-	-	4,520	-	-
Total assets that include financial    instruments	127,060	5,632	84,137	733	2,264	32,856	-	1,438
Total other non-financial assets	6,488	-	-	-	-	-	-	6,488
Total assets	133,548	5,632	84,137	733	2,264	32,856	-	7,926
Liabilities
Long-term business policyholder    liabilities	7,714	-	-	-	-	-	-	7,714
Investment contract liabilities	67,854	-	60,769	-	-	-	-	7,085
Third-party interest in    consolidation of funds	4,661	-	4,661	-	-	-	-	-
Borrowed funds	3,524	-	804	-	-	-	2,720	-
Trade, other payables and    other liabilities	3,787	547	383	-	-	-	1,547	1,310
Amounts owed to bank depositors	32,328	4,580	2,885	-	-	-	24,863	-
Derivative financial instruments	3,317	3,317	-	-	-	-	-	-
Total liabilities that include financial    instruments	123,185	8,444	69,502	-	-	-	29,130	16,109
Total other non-financial liabilities	1,429	-	-	-	-	-	-	1,429
Total liabilities	124,614	8,444	69,502	-	-	-	29,130	17,538

¹        Investments in associated undertakings and joint ventures classified as non-financial assets and liabilities are equity accounted.

E: Financial assets and liabilities continued

E2: Fair values of financial assets and liabilities

(a) Determination of fair value

The best evidence of fair value is a quoted price in an active market. In the event that the market for a financial asset or liability is not active, or quoted prices cannot be obtained without undue effort, another valuation technique is used.

In general, the following inputs are taken into account when evaluating the fair value of financial instruments:

n Assessing whether instruments are trading with sufficient frequency and volume, that they can be considered liquid

n The inclusion of a measure of the counterparties' non-performance risk in the fair-value measurement of loans and advances, which involves the modelling of dynamic credit spreads

n The inclusion of credit valuation adjustment (CVA) and debit valuation adjustment (DVA) in the fair-value measurement of derivative instruments, and

n The inclusion of own credit risk in the calculation of the fair value of financial liabilities.

There have been no significant changes in the valuation techniques applied when valuing financial instruments. The general principles applied to those instruments measured at fair value are outlined below:

Reinsurers' share of policyholder liabilities

Reinsurers' share of policyholder liabilities are measured on a basis that is consistent with the measurement of the provisions held in respect of the related insurance contracts.

Loans and advances

Loans and advances include mortgage loans, other asset-based loans, including collateralised debt obligations, and other secured and unsecured loans.

In the absence of an observable market for these instruments, the fair value is determined by using internally developed models that are specific to the instrument and that incorporate all available observable inputs. These models involve discounting the contractual cash flows by using a credit-adjusted zero-coupon rate.

Investments and securities

Investments and securities include government and government-guaranteed securities, listed and unlisted debt securities, preference shares and debentures, listed and unlisted equity securities, listed and unlisted pooled investments (see below), short-term funds and securities treated as investments and certain other securities.

Pooled investments represent the Group's holdings of shares/units in open-ended investment companies, unit trusts, mutual funds and similar investment vehicles. Pooled investments are recognised at fair value. The fair values of pooled investments are based on widely published prices that are regularly updated or models based on the market prices of investments held in the underlying pooled investment funds.

Other investment and securities that are measured at fair value are measured at observable market prices where available. In the absence of observable market prices, these investments and securities are fair valued utilising one or more of the following techniques: discounted cash flows, the application of an EBITDA multiple or any other relevant technique.

Investments in associated undertakings and joint ventures

Investments in associated undertakings and joint ventures are valued using appropriate valuation techniques. These may include price earnings multiples, discounted cash flows or the adjusted value of similar completed transactions.

Derivatives

The fair value of derivatives is determined with reference to the exchange traded prices of the specific instruments. In situations where the derivatives are traded over the counter the fair value of the instruments is determined by the utilisation of option pricing models.

Investment contract liabilities

The fair value of the investment contract liabilities is determined with reference to the underlying funds that are held by the Group.

Third-party interest in consolidation of funds

Third-party interests in consolidation of funds are measured at the attributable net asset value of each fund.

Amounts owed to bank depositors

The fair values of amounts owed to bank depositors correspond with the carrying amount shown in the statement of financial position, which generally reflects the amount payable on demand.

Borrowed funds

The fair values of amounts included in borrowed funds are based on quoted market prices at the reporting date where applicable, or by reference to quoted prices of similar instruments.

Other financial assets and liabilities

The fair values of other financial assets and liabilities (which comprise cash and cash equivalents, cash with central banks, other assets and liabilities) are reasonably approximated by the carrying amounts reflected in the statement of financial position as they are short-term in nature or re-price to current market rates frequently.

(b) Fair value hierarchy

Fair values are determined according to the following hierarchy.

Description of hierarchy	Types of instruments classified in the respective levels
Level 1 - quoted market prices: financial assets and liabilities with quoted prices for identical instruments in active markets.	Listed equity securities, government securities and other listed debt securities and similar instruments, actively traded pooled investments, certain quoted derivative assets and liabilities, listed borrowed funds and investment contract liabilities directly linked to other Level 1 financial assets.
Level 2 - valuation techniques using observable inputs: financial assets and liabilities with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial assets and liabilities valued using models where all significant inputs are observable.	Unlisted equity and debt securities where the valuation is based on models involving no significant unobservable data. Certain loans and advances, certain privately placed debt instruments, third-party interests in consolidated funds and amounts owed to bank depositors.
Level 3 - valuation techniques using significant unobservable inputs: financial assets and liabilities valued using valuation techniques where one or more significant inputs are unobservable.	Unlisted equity and securities with significant unobservable inputs, securities where the market is not considered sufficiently active, including certain inactive pooled investments, and derivatives embedded in certain portfolios of insurance contracts where the derivative is not closely related to the host contract and the valuation contains significant unobservable inputs.

The judgement as to whether a market is active may include, for example, consideration of factors such as the magnitude and frequency of trading activity, the availability of prices and the size of bid/offer spreads. In inactive markets, obtaining assurance that the transaction price provides evidence of fair value or determining the adjustments to transaction prices that are necessary to measure the fair value of the asset or liability requires additional work during the valuation process.

The majority of valuation techniques employ only observable data and so the reliability of the fair value measurement is high. However, certain financial assets and liabilities are valued on the basis of valuation techniques that feature one or more significant inputs that are unobservable and, for them, the derivation of fair value is more judgemental. A financial asset or liability in its entirety is classified as valued using significant unobservable inputs if a significant proportion of that asset or liability's carrying amount is driven by unobservable inputs.

In this context, 'unobservable' means that there is little or no current market data available for which to determine the price at which an arm's length transaction would be likely to occur. It generally does not mean that there is no market data available at all upon which to base a determination of fair value. Furthermore, in some cases the majority of the fair value derived from a valuation technique with significant unobservable data may be attributable to observable inputs. Consequently, the effect of uncertainty in determining unobservable inputs will generally be restricted to uncertainty about the overall fair value of the asset or liability being measured.

(c) Transfer between fair value hierarchies

The Group deems a transfer to have occurred between Level 1 and Level 2 when an active, traded primary market ceases to exist for that financial instrument. A transfer between Level 2 and Level 3 occurs when the majority of the significant inputs used to determine fair value of the instrument become unobservable.

E: Financial assets and liabilities continued

E3: Disclosure of financial assets and liabilities measured at Fair Value

(a) Financial assets and liabilities measured at fair value, classified according to fair value hierarchy

The tables below presents a summary of the Group's financial assets and liabilities that are measured at fair value in the consolidated statement of financial position according to their IAS 39 classification, as set out in the accounting policies note L1 of the 2015 Annual Report and Accounts and in terms of the fair value hierarchy described in note E2. The majority of the Group's financial assets are measured utilising market observable inputs (Level 1) and there has been no significant change compared to the prior year.

Summary

	At 30 June 2016		At 30 June 2015		At 31 December 2015
	£m	%	£m	%	£m	%
Financial assets measured at fair value
Level 1	79,373	82.8%	78,172	83.5%	77,722	85.9%
Level 2	14,929	15.6%	13,991	15.0%	11,388	12.6%
Level 3	1,576	1.6%	1,403	1.5%	1,392	1.5%
Total	95,878	100.0%	93,566	100.0%	90,502	100.0%
Financial liabilities measured at fair value
Level 1	48,096	60.4%	46,967	61.1%	48,887	62.7%
Level 2	30,919	38.9%	29,261	38.1%	28,461	36.5%
Level 3	561	0.7%	602	0.8%	598	0.8%
Total	79,576	100.0%	76,830	100.0%	77,946	100.0%

Detail analysis

				£m
At 30 June 2016	Total	Level 1	Level 2	Level 3
Financial assets measured at fair value
Held-for-trading (fair value through profit or loss)	4,848	843	3,985	20
Loans and advances	1,784	-	1,784	-
Investments and securities	1,241	561	680	-
Other financial assets	282	282	-	-
Derivative financial instruments - assets	1,541	-	1,521	20
Designated (fair value through profit or loss)	90,237	78,527	10,154	1,556
Investments in associated undertakings and joint ventures	74	-	-	74
Reinsurers' share of policyholder liabilities	2,596	2,596	-	-
Loans and advances	3,482	189	3,291	2
Investments and securities	84,085	75,742	6,863	1,480
Available-for-sale financial assets (fair value through equity)	793	3	790	-
Loans and advances	2	2	-	-
Investments and securities	791	1	790	-
Total assets measured at fair value	95,878	79,373	14,929	1,576
Financial liabilities measured at fair value
Held-for-trading (fair value through profit or loss)	7,792	824	6,961	7
Other liabilities	823	812	11	-
Amounts owed to bank depositors	5,385	-	5,385	-
Derivative financial instruments - liabilities	1,584	12	1,565	7
Designated (fair value through profit or loss)	71,784	47,272	23,958	554
Investment contract liabilities1	60,364	46,277	13,533	554
Third-party interests in consolidated funds	6,585	-	6,585	-
Borrowed funds	868	854	14	-
Other liabilities	667	141	526	-
Amounts owed to bank depositors	3,300	-	3,300	-
Total liabilities measured at fair value	79,576	48,096	30,919	561

¹   Investment contract liabilities amount excludes £8,676 million discretionary participating investment contracts. These contracts are classified as non-financial liabilities and are not analysed according to their fair value hierarchy as permitted by IFRS 7 'Financial Instruments: Disclosures'.

				£m
At 30 June 2015	Total	Level 1	Level 2	Level 3
Financial assets measured at fair value
Held-for-trading (fair value through profit or loss)	4,202	239	3,945	18
Loans and advances	2,017	-	2,017	-
Investments and securities	953	167	786	-
Other financial assets	71	71	-	-
Derivative financial instruments - assets	1,161	1	1,142	18
Designated (fair value through profit or loss)	88,715	77,806	9,524	1,385
Investments in associated undertakings and joint ventures	54	-	-	54
Reinsurers' share of policyholder liabilities	2,082	2,082	-	-
Loans and advances	3,425	175	3,248	2
Investments and securities	82,866	75,261	6,276	1,329
Other financial assets	288	288	-	-
Available-for-sale financial assets (fair value through equity)	649	127	522	-
Loans and advances	2	2	-	-
Investments and securities	647	125	522	-
Total assets measured at fair value	93,566	78,172	13,991	1,403
Financial liabilities measured at fair value
Held-for-trading (fair value through profit or loss)	6,430	690	5,739	1
Other liabilities	704	686	18	-
Amounts owed to bank depositors	4,565	-	4,565	-
Derivative financial instruments - liabilities	1,161	4	1,156	1
Designated (fair value through profit or loss)	70,400	46,277	23,522	601
Investment contract liabilities1	60,905	45,507	14,797	601
Third-party interests in consolidated funds	5,678	-	5,678	-
Borrowed funds	802	726	76	-
Other liabilities	430	44	386	-
Amounts owed to bank depositors	2,585	-	2,585	-
Total liabilities measured at fair value	76,830	46,967	29,261	602

¹   Investment contract liabilities amount excludes £7,881 million discretionary participating investment contracts. These contracts are classified as non-financial liabilities and are not analysed according to their fair value hierarchy as permitted by IFRS 7 'Financial Instruments: Disclosures'.

E: Financial assets and liabilities continued

E3: Disclosure of financial assets and liabilities measured at Fair Value continued

(a) Financial assets and liabilities measured at fair value, classified according to fair value hierarchy continued

				£m
At 31 December 2015	Total	Level 1	Level 2	Level 3
Financial assets measured at fair value
Held-for-trading (fair value through profit or loss)	5,632	524	5,090	18
Loans and advances	1,491	-	1,491	-
Investments and securities	883	337	546	-
Other financial assets	182	182	-	-
Derivative financial instruments - assets	3,076	5	3,053	18
Designated (fair value through profit or loss)	84,137	77,195	5,568	1,374
Investments in associated undertakings and joint ventures	51	-	-	51
Reinsurers' share of policyholder liabilities	2,328	2,328	-	-
Loans and advances	3,035	181	2,853	1
Investments and securities	78,723	74,686	2,715	1,322
Other financial assets	-	-	-	-
Available-for-sale financial assets (fair value through equity)	733	3	730	-
Loans and advances	2	2	-	-
Investments and securities	731	1	730	-
Total assets measured at fair value	90,502	77,722	11,388	1,392
Financial liabilities measured at fair value
Held-for-trading (fair value through profit or loss)	8,444	545	7,895	4
Other liabilities	547	539	8	-
Amounts owed to bank depositors	4,580	-	4,580	-
Derivative financial instruments - liabilities	3,317	6	3,307	4
Designated (fair value through profit or loss)	69,502	48,342	20,566	594
Investment contract liabilities1	60,769	47,508	12,667	594
Third-party interests in consolidated funds	4,661	-	4,661	-
Borrowed funds	804	794	10	-
Other liabilities	383	40	343	-
Amounts owed to bank depositors	2,885	-	2,885	-
Total liabilities measured at fair value	77,946	48,887	28,461	598

¹   Investment contract liabilities amount excludes £7,085 million discretionary participating investment contracts. These contracts are classified as non-financial liabilities and are not analysed according to their fair value hierarchy as permitted by IFRS 7 'Financial Instruments: Disclosures'.

(b) Level 3 fair value hierarchy disclosure

The tables below reconcile the opening balances of Level 3 financial assets and liabilities to closing balances at the end of the period:

					£m
	Held-for-trading	Designated fair value through profit or loss			Total
Six months ended 30 June 2016	Derivatives	Investments in associated undertakings and joint ventures	Loans and advances	Investments and securities
Level 3 financial assets
At beginning of the period	18	51	1	1,322	1,392
Total net fair value gains recognised in:
- profit or loss	-	8	-	48	56
- other comprehensive income	-	7	-	1	8
Purchases and issues	-	-	-	73	73
Sales and settlements	-	(2)	-	(122)	(124)
Transfers in	-	-	-	62	62
Transfers out	-	-	-	(46)	(46)
Foreign exchange and other	2	10	1	142	155
Total level 3 financial assets	20	74	2	1,480	1,576
Fair value gains relating to assets held at    30 June 2016 recognised in:
- profit or loss	-	8	-	41	49
- other comprehensive income	-	7	-	1	8

The carrying amount of Level 3 assets at the reporting date principally comprises:

Investments and securities - designated at fair value through the income statement:

§  £50 million (December 2015: £162 million) of suspended funds, £329 million (2015: £301 million) of private company shares and unlisted pooled investments, £68 million (2015: £36 million) of funds not being actively priced and £11 million (December 2015: £10 million) of structured notes held by Old Mutual Wealth. These assets are held by linked funds and are matched exactly by Level 3 investment contract liabilities

§  £925 million (December 2015: £727 million) of private company shares and unlisted pooled investments held by Emerging Markets. Of this amount, £877 million (2015: £666 million)  is held by policyholder funds for which the bulk of the investment  risk is borne by policyholders; and

§  £63 million (December 2015: £55 million) relating to timber and real estate assets held by funds of Old Mutual Asset Management.

Investments in associated undertakings and joint ventures - designated a fair value through the income statement:

§  £74  million (December 2015: £51 million) of investments held by Nedbank

Derivative assets - held for trading:

§  £20 million (December 2015: £18 million) held by the Bermuda business in connection with hedging of investment guarantees

Amounts shown as purchases and issues arise principally from the purchase of private company shares and unlisted pooled investments by Old Mutual Wealth and Emerging Markets.

Amounts shown as sales and settlements arise principally from the sale of private company shares and unlisted pooled investments by Old Mutual Wealth and Emerging Markets and from distributions received in respect of Old Mutual Wealth's holdings in property funds.

Transfers into Level 3 assets comprise £62 million of private company shares held by Old Mutual Wealth that were previously shown within Level 2 and for which price updates have not been received for more than six months.

Transfers out of Level 3 assets comprise £36 million of private company shares held by Old Mutual Wealth that were not being repriced and that have been transferred into Level 2 as they are now actively priced and £10 million in Emerging Markets relating to unlisted company shares and private equity funds which have been reclassified in the current period as non-financial assets.

E: Financial assets and liabilities continued

E3: Disclosure of financial assets and liabilities measured at Fair Value continued

			£m
Six months ended 30 June 2016	Held-for-trading - Derivatives	Designated fair value through profit or loss - Investment contract liabilities	Total
Level 3 financial liabilities
At beginning of the period	4	594	598
Total net fair value losses recognised in profit or loss for the period	2	10	12
Purchases and issues	-	13	13
Sales and settlements	-	(101)	(101)
Transfers in	-	62	62
Transfers out	-	(36)	(36)
Foreign exchange and other	1	12	13
Total level 3 financial liabilities	7	554	561
Fair value losses relating to liabilities held at 30 June 2016 recognised in profit or loss	2	10	12

The carrying amount of Level 3 investment contract liabilities at 30 June 2016 comprises:

§  £457 million (December 2015: £509 million) held within Old Mutual Wealth in linked-funds and which exactly match against Level 3 assets disclosed above within Investments and securities - designated fair value  through profit or loss; and

§  £97 million (December 2015: £85 million) held by the Bermuda business relating to guarantees given to policyholders.

									£m
	Held-for-trading	Designated at fair value through profit or loss					Available- for-sale		Total
Six months ended 30 June 2015	Derivatives	Investments in associated undertakings and joint ventures	Loans and advances		Investments and securities		Investments and securities
Level 3 financial assets
At beginning of the period	8	50	2		1,552		1		1,613
Total net fair value gains recognised in the profit or loss for the period	-	2	-		2		-		4
Purchases and issues	11	5	-		143		-		159
Sales and settlements	-	-	-		(309)		(1)		(310)
Transfers in	-	-	-		48		-		48
Transfers out	-	-	-		(59)		-		(59)
Foreign exchange and other	(1)	(3)	-		(48)		-		(52)
Total level 3 financial assets	18	54	2		1,329		-		1,403
Fair value gains/(losses) relating to    assets held at 30 June 2015    recognised in profit or loss	-	2	-		(14)		-		(12)
								£m
Six months ended 30 June 2015				Held-for-trading - Derivatives		Designated fair value through profit or loss - Investment contract liabilities		Total
Level 3 financial liabilities (Designated fair value through profit or loss)
At beginning of the period				-		754		754
Total net fair value gains recognised in profit or loss for the period				-		(38)		(38)
Purchases and issues				-		65		65
Sales and settlements				-		(228)		(228)
Transfers in				1		48		49
Total level 3 financial liabilities				1		601		602
Fair value gains relating to assets held at 30 June 2015 recognised in profit or loss				-		(38)		(38)

						£m
	Held-for-trading	Designated at fair value through profit or loss			Available- for-sale	Total
Year ended 31 December 2015	Derivatives	Investments in associated undertakings and joint ventures	Loans and advances	Investments and securities	Investments and securities
Level 3 financial assets
At beginning of the period	8	50	2	1,552	1	1,613
Total net fair value (losses)/gains    recognised in the profit or loss    for the year	(5)	5	-	40	-	40
Total gains recognised in other   comprehensive income	-	-	-	(1)	-	(1)
Purchases and issues	14	16	-	288	-	318
Sales and settlements	-	(7)	-	(332)	(1)	(340)
Transfers in	-	-	-	80	-	80
Transfers out	-	-	-	(69)	-	(69)
Foreign exchange and other	1	(13)	(1)	(236)	-	(249)
Total level 3 financial assets	18	51	1	1,322	-	1,392
Fair value (losses)/gains relating    to assets held at 31 December 2015    recognised in profit or loss	(5)	5	-	(25)	-	(25)

			£m
Year ended 31 December 2015	Held-for-trading - Derivatives	Designated fair value through profit or loss - Investment contract liabilities	Total
Level 3 financial liabilities
At beginning of the period	-	754	754
Total net losses/(gains) recognised in profit or loss for the period	3	(69)	(66)
Purchases and issues	1	96	97
Sales and settlements	-	(188)	(188)
Transfers in	-	52	52
Transfers out	-	(55)	(55)
Foreign exchange and other	-	4	4
Total level 3 financial liabilities	4	594	598
Fair value gains relating to liabilities held at 31 December 2015 recognised in profit or loss	3	(63)	(60)

E: Financial assets and liabilities continued

E3: Disclosure of financial assets and liabilities measured at Fair Value continued

(c) Effect of changes in significant unobservable assumptions to reasonable possible alternatives

Favourable and unfavourable changes are determined on the basis of changes in the value of the financial asset or liability as a result of varying the levels of the unobservable parameters using statistical techniques. When parameters are not amenable to statistical analysis, quantification of uncertainty is judgemental.

When the fair value of a financial asset or liability is affected by more than one unobservable assumption, the figures shown reflect the most favourable or most unfavourable change from varying the assumptions individually.

The valuations of the private equity investments are performed on an asset-by-asset basis using a valuation methodology appropriate to the specific investment and in line with industry guidelines. In determining the valuation of the investment the principal assumption used is the valuation multiple applied to the main financial indicators (such as adjusted earnings). The source of this multiple may include multiples for comparable listed companies which have been adjusted for discounts for non-tradability and valuation multiples earned on transactions in comparable sectors.

The valuations of asset-backed securities are determined by discounted cash flow models that generate the expected value of the asset, incorporating benchmark information on factors such as prepayment patterns, default rates, loss severities and the historical performance of the underlying assets. The outputs from the models used are calibrated with reference to similar securities for which external market information is available.

Structured notes and other derivatives are generally valued using option pricing models. For structured notes and other derivatives, principal assumptions concern the future volatility of asset values and the future correlation between asset values. These principal assumptions used in the valuation of structured credit notes include credit volatilities and correlations. For such unobservable assumptions, estimates are based on available market data, which may include the use of a proxy method to derive a volatility or correlation from comparable assets for which market data is more readily available, and examination of historical levels.

The table below summarises the significant inputs to value instruments categorised as Level 3 hierarchy and their sensitivity to changes in the inputs used. 

Types of financial instruments	Fair values		Significant unobservable input	Range of estimates for unobservable inputs	Fair value measurement sensitivity to unobservable inputs
	At 30 June 2016 £m	At 31 December 2015 £m			At 30 June 2016 £m	At 31 December 2015 £m
Assets
Investments in associated undertakings and joint ventures	74	51	Valuation multiples	-7% to +8%	Favourable: 6 Unfavourable: 7	Favourable: 4 Unfavourable: 5
Investments and securities	1,480	1,322	Valuation multiples Correlations Volatilities Credit spreads Dividend growth rates Internal rates of return, Cost of capital Inflation rates Market adjusted price (Price of infrequently traded shares)	Nedbank:  -12% to +10% Emerging Markets: -10% to +10% Old Mutual Wealth: -10% to +10%	Favourable: 188 Unfavourable: 182	Favourable: 149 Unfavourable: 141
Loans and advances	2	1	Correlations Volatilities Credit spreads	-12% to +10%	Favourable: £nil Unfavourable: £nil	Favourable: £nil Unfavourable: £nil
Derivatives	20	18	Interest rates Volatilities	-10% to +10%	Favourable: 7 Unfavourable: 7	Favourable: 7 Unfavourable: 7
Liabilities
Investment contract liabilities	554	594	Interest rates Volatilities	-10% to 10%	Favourable: 47 Unfavourable: 50	Favourable: 54 Unfavourable: 58
Derivatives	7	4	Growth rates Cost of equity and price-to-book	-10% to 10%	Favourable: 1 Unfavourable: 1	Favourable: 2 Unfavourable: 1

F: Analysis of financial assets and liabilities

F1: Loans and advances

The Group extends advances to individuals and to the corporate, commercial and public sectors. The majority of loans and advances are in respect of Nedbank which represent 96.7% (£35,574 million) (June 2015: 96.9% (£33,572 million); December 2015: 96.5% (£29,873 million)) of the Group's net loans and advances. Nedbank assesses its loan portfolios for impairment at each financial reporting date and manages its exposure to loans and advances through a documented credit approval processes.

Emerging Markets has lending exposure, net of credit impairment provisions, of £1,029 million (June 2015: £909 million; December 2015: £912 million) through its non-wholly owned subsidiaries in South Africa, Kenya and Zimbabwe. Credit loss ratios are monitored at each individual business unit level.

(a) Categories of loans and advances

The following table provides an analysis of the categories of loans and advances that are provided by the Group. The amounts presented in this table are the carrying value of the underlying assets before provisions for impairment losses.

				£m
	Notes	At 30 June 2016	At 30 June 2015	At 31 December 2015
Home loans		7,555	7,461	6,409
Commercial mortgages		7,411	6,901	6,098
Unsecured retail lending	F1(b)	1,845	1,759	1,558
Other term loans		5,276	4,804	3,961
Other loans to clients		6,022	5,412	5,663
Net finance leases and instalment debtors		5,185	5,053	4,377
Deposits placed under reverse purchase agreements		1,018	1,043	884
Overdrafts		968	891	751
Preference shares and debentures		1,082	889	907
Credit cards		753	741	616
Factoring accounts		262	267	234
Policyholder loans		256	243	241
Properties in possession		17	30	16
Remittances in transit		72	15	9
Gross loans and advances		37,722	35,509	31,724
Provisions for impairment		(921)	(854)	(759)
Specific provisions	F1(c)	(642)	(624)	(529)
Portfolio provisions	F1(c)	(279)	(230)	(230)
Total net loans and advances		36,801	34,655	30,965

(b)(i) Analysis of unsecured retail lending loans and advances

The following table provides an analysis of the Group's unsecured retail lending loans and advances. Further analysis of these amounts will be comparing balances at 30 June 2016 and 31 December 2015.

			£m
	At 30 June 2016	At 30 June 2015	At 31 December 2015
Nedbank	942	920	782
Emerging Markets	903	839	776
Old Mutual Finance (Pty) Limited	718	677	602
Central Africa Building Society	97	93	98
Faulu Microfinance Bank Limited	88	69	76
Gross amount of unsecured retail lending	1,845	1,759	1,558
Provisions for impairment	(432)	(396)	(350)
Total net unsecured retail lending	1,413	1,363	1,208

F: Analysis of financial assets and liabilities continued

F1: Loans and advances continued

(ii) Credit quality of unsecured retail lending loans and advances

The credit quality of the Group's unsecured retail lending loans and advances is summarised below, by reference to performing, defaulted and long outstanding balances at 30 June 2016 and 31 December 2015. Old Mutual Finance (Pty) Limited provides for 90% of long outstanding loans. Nedbank, CABS & Faulu provide for 100% of such loans and derecognise the related receivable.

					£m
	Nedbank	Old Mutual Finance (Pty) Limited	Central Africa Building Society	Faulu Microfinance Bank Limited	At 30 June 2016
Performing	828	352	92	84	1,356
Non-performing	114	366	5	4	489
Defaulted loans	114	143	5	4	266
Long outstanding loans	-	223	-	-	223
Gross amount of unsecured retail lending	942	718	97	88	1,845

					£m
	Nedbank	Old Mutual Finance (Pty) Limited	Central Africa Building Society	Faulu Microfinance Bank Limited	At 31 December 2015
Performing	679	317	93	74	1,163
Non-performing	103	285	5	2	395
Defaulted loans	103	124	5	2	234
Long outstanding loans	-	161	-	-	161
Gross amount of unsecured retail lending	782	602	98	76	1,558

Loans are considered to be defaulted after three missed payments. Long outstanding loans relate to loans that have been in default for a period of five months or more.

(iii) Statement of financial position credit impairment provisions of unsecured retail lending loans and advances

Provisions for credit impairments in relation to the Group's unsecured retail lending loans and advances at 30 June 2016 and 31 December 2015 are analysed below:

					£m
	Nedbank	Old Mutual Finance (Pty) Limited	Central Africa Building Society	Faulu Microfinance Bank Limited	At 30 June  2016
Performing	46	78	3	-	127
Non-performing	73	229	1	2	305
Defaulted loans	73	31	1	2	107
Long outstanding loans	-	198	-	-	198
Provisions for impairment	119	307	4	2	432
					£m
	Nedbank	Old Mutual Finance (Pty) Limited	Central Africa Building Society	Faulu Microfinance Bank Limited	At 31 December 2015
Performing	35	18	1	-	54
Non-performing	68	223	4	1	296
Defaulted loans	68	78	4	1	151
Long outstanding loans	-	145	-	-	145
Provisions for impairment	103	241	5	1	350

(c) Provision for impairments

This section analyses the provisions raised against loans and advances and the movements during the year.

Specific impairments have been raised against those loans identified as impaired. Portfolio impairments are recognised against loans and advances classified as neither past due nor impaired or past due but not impaired.

(c)(i) Provision for impairments - analysis of movements

The tables below reconcile the movement in provision for impairments for the six months ended 30 June 2016 and year ended 31 December 2015.

							£m
	Nedbank			Emerging Markets			Group
Six months ended 30 June 2016	Specific impairment	Portfolio impairment	Total impairment	Specific impairment	Portfolio impairment	Total impairment	Total impairment
Balance at beginning of the period	292	208	500	237	22	259	759
Credit impairment charge	95	5	100	3	13	16	116
Profit or loss charge	120	5	125	3	13	16	141
Recoveries of amounts previously written off	(25)	-	(25)	-	-	-	(25)
Amounts written off against the provision	(115)	(3)	(118)	(1)	(4)	(5)	(123)
Foreign exchange and other movements	71	39	110	60	(1)	59	169
Balance at end of the period	343	249	592	299	30	329	921
							£m
	Nedbank			Emerging Markets			Group
Year ended 31 December 2015	Specific impairment	Portfolio impairment	Total impairment	Specific impairment	Portfolio impairment	Total impairment	Total impairment
Balance at beginning of the year	379	237	616	217	24	241	857
Credit impairment charge	223	22	245	59	3	62	307
Profit or loss charge	281	22	303	59	3	62	365
Recoveries of amounts previously written off	(58)	-	(58)	-	-	-	(58)
Amounts written off against the provision	(231)	1	(230)	-	-	-	(230)
Foreign exchange and other movements	(79)	(52)	(131)	(39)	(5)	(44)	(175)
Balance at end of the year	292	208	500	237	22	259	759

F: Analysis of financial assets and liabilities continued

F2: Insurance and investment contracts

The tables below provide a summary of the Group's long-term business insurance policyholder liabilities and investment contract liabilities. Details of insurance contract accounting for the Group can be found in note G6 of the 2015 Annual Report and Accounts.

						£m
	At 30 June 2016			At 30 June 2015
	Gross	Reinsurance	Net	Gross	Reinsurance	Net
Life assurance policyholder liabilities
Long-term business insurance policyholder    liabilities	9,183	(312)	8,871	9,851	(201)	9,650
Life assurance policyholder liabilities	9,061	(302)	8,759	9,730	(191)	9,539
Outstanding claims	122	(10)	112	121	(10)	111
Investment contract liabilities	69,040	(2,597)	66,443	68,786	(2,079)	66,707
Unit-linked investment contracts and similar contracts	59,537	(2,597)	56,940	60,186	(2,079)	58,107
Other investment contracts	827	-	827	719	-	719
Discretionary participating investment contracts	8,676	-	8,676	7,881	-	7,881
Total life assurance policyholder liabilities	78,223	(2,909)	75,314	78,637	(2,280)	76,357
Property & casualty liabilities
Claims incurred but not reported	59	(8)	51	62	(12)	50
Unearned premiums	142	(61)	81	120	(40)	80
Outstanding claims	224	(80)	144	212	(62)	150
Total property & casualty liabilities	425	(149)	276	394	(114)	280
Total policyholder liabilities	78,648	(3,058)	75,590	79,031	(2,394)	76,637
						£m
				At 31 December 2015
				Gross	Reinsurance	Net
Life assurance policyholder liabilities
Long-term business insurance policyholder    liabilities				7,714	(214)	7,500
Life assurance policyholder liabilities				7,617	(206)	7,411
Outstanding claims				97	(8)	89
Investment contract liabilities				67,854	(2,328)	65,526
Unit-linked investment contracts and similar contracts				60,169	(2,328)	57,841
Other investment contracts				600	-	600
Discretionary participating investment contracts				7,085	-	7,085
Total life assurance policyholder liabilities				75,568	(2,542)	73,026
Property & casualty liabilities
Claims incurred but not reported				38	(10)	28
Unearned premiums				120	(58)	62
Outstanding claims				183	(51)	132
Total property & casualty liabilities				341	(119)	222
Total policyholder liabilities				75,909	(2,661)	73,248

The reinsurers' share of policyholder liabilities relating to investment contracts is where the direct management of assets are ceded to a third party through a reinsurance arrangement. Due to the nature of the arrangement, there is no transfer of insurance risk.

F: Financial assets and liabilities continued

F3: Borrowed funds

The Group raises funding in the normal course of business. The borrowed funds raised for the banking business support the lending and banking operations of the Group. Other borrowed funds raised support the general funding needs of the Group and the expense has been recognised as finance costs.

The table below presents an analysis of the Group's borrowed funds net of any holdings that are principally held by the policyholder funds.

Summary of Borrowed Funds						£m
Type of securities	Notes	Old Mutual plc	Emerging Markets	Nedbank	Institutional Asset Management	At 30 June 2016
Senior debt securities and term loans		112	203	1,941	-	2,256
Floating rate notes	F3(a)(i)	-	-	1,053	-	1,053
Fixed rate notes	F3(a(ii)	112	-	888	-	1,000
Term loans	F3(a)(iii)	-	203	-	-	203
Revolving credit facilities	F3(b)	-	-	-	38	38
Mortgage-backed securities	F3(c)	-	-	104	-	104
Subordinated debt securities	F3(d)	991	302	540	-	1,833
Total Borrowed funds		1,103	505	2,585	38	4,231
Other instruments treated as equity    for accounting purposes
£273 million perpetual preferred callable    securities at 6.38%1		273	-	-	-	273
Total book value of Group debt2		1,376	505	2,585	38	4,504

¹        Perpetual preferred callable securities of £273 million (June 2015: £526 million; December 2015: £273 million) are classified as non-banking.

²        The nominal value of non-banking related "Group debt" is £1,716 million (June 2015: £1,557 million; December 2015: £1,710 million).

						£m
	Notes	Old Mutual plc	Emerging Markets	Nedbank	Institutional Asset Management	At 30 June 2015
Senior debt securities and term loans	F3(a)	112	123	1,560	-	1,795
Floating rate notes	F3(a)(i)	-	-	722	-	722
Fixed rate notes	F3(a(ii)	112	-	838	-	950
Term loans	F3(a)(iii)	-	123	-	-	123
Revolving credit facilities	F3(b)	-	51	-	92	143
Mortgage-backed securities	F3(c)	-	-	119	-	119
Subordinated debt securities	F3(d)	568	315	626	-	1,509
Total Borrowed funds		680	489	2,305	92	3,566
Other instruments treated as equity    for accounting purposes
£273 million perpetual preferred callable    securities at 6.38%		273	-	-	-	273
€374 million perpetual preferred callable    securities at 5.00%1		253	-	-	-	253
Total book value of Group debt		1,206	489	2,305	92	4,092

¹        On 4 November 2015, being the First Call Date, the Company redeemed the outstanding €374 million (£253 million) Upper Tier 2 perpetual notes at their nominal value, together with accrued and unpaid interest.

F: Financial assets and liabilities continued

F3: Borrowed funds continued

						£m
Type of securities	Notes	Old Mutual plc	Emerging Markets	Nedbank	Institutional Asset Management	At 31 December 2015
Senior debt securities and term loans		112	198	1,331	-	1,641
Floating rate notes	F3(a)(i)	-	-	571	-	571
Fixed rate notes	F3(a(ii)	112	-	760	-	872
Term loans	F3(a)(iii)	-	198	-	-	198
Revolving credit facilities	F3(b)	-	-	-	61	61
Mortgage-backed securities	F3(c)	-	-	97	-	97
Subordinated debt securities	F3(d)	986	251	488	-	1,725
Total Borrowed funds		1,098	449	1,916	61	3,524
Other instruments treated as equity    for accounting purposes
£273 million perpetual preferred callable    securities at 6.38%		273	-	-	-	273
Total book value of Group debt		1,371	449	1,916	61	3,797

Total borrowed funds can be further analysed between non-banking and banking as follows:

						£m
	At 30 June 2016			At 30 June 2015
Type of security	Non- banking	Banking1	Total	Non- banking	Banking1	Total
Senior debt securities and term loans	147	2,109	2,256	112	1,683	1,795
Revolving credit facilities	38	-	38	92	51	143
Mortgage-backed securities	-	104	104	-	119	119
Subordinated debt securities	1,293	540	1,833	883	626	1,509
Total Borrowed funds	1,478	2,753	4,231	1,087	2,479	3,566
						£m
				At 31 December 2015
Type of security				Non- banking	Banking1	Total
Senior debt securities and term loans				160	1,481	1,641
Revolving credit facilities				61	-	61
Mortgage-backed securities				-	97	97
Subordinated debt securities				1,237	488	1,725
Total Borrowed funds				1,458	2,066	3,524

¹        Borrowed funds identified as Banking are those which are directly related to the lending and banking businesses in Nedbank and Emerging Markets.

Interest rate profile

The interest rate profiles of the Group's borrowed funds are analysed as follows:

						£m
		Old Mutual plc	Emerging Markets	Nedbank	Institutional Asset Management	At 30 June 2016
Fixed rate		1,103	251	888	-	2,242
Floating rate		-	254	1,697	38	1,989
Total		1,103	505	2,585	38	4,231
						£m
		Old Mutual plc	Emerging Markets	Nedbank	Institutional Asset Management	At 30 June 2015
Fixed rate		680	282	838	-	1,800
Floating rate		-	207	1,467	92	1,766
Total		680	489	2,305	92	3,566
						£m
		Old Mutual plc	Emerging Markets	Nedbank	Institutional Asset Management	At 31 December 2015
Fixed rate		1,098	218	760	-	2,076
Floating rate		-	231	1,156	61	1,448
Total		1,098	449	1,916	61	3,524

Analysis of security types

(a) Senior debt securities and term loans

(i) Floating rate notes (net of Group holdings)

				£m
	Maturity date	At 30 June 2016	At 30 June 2015	At 31 December 2015
Banking - Nedbank Floating rate unsecured senior debt
R250 million at JIBAR + 1.00%	Repaid	-	13	-
R1,044 million at JIBAR + 2.20%	Repaid	-	55	-
R677 million at JIBAR + 1.25%	Repaid	-	35	30
R3,056 million at JIBAR + 0.80%	July 2016	158	161	135
R694 million at JIBAR + 0.75%	November 2016	36	37	31
R405 million at JIBAR + 1.30%	February 2017	21	21	18
R1,035 million at JIBAR + 0.85%	March 2017	53	54	45
R806 million at JIBAR + 0.90%	June 2017	41	42	35
R786 million at JIBAR + 1.30%	August 2017	37	37	31
R241 million at JIBAR + 1.12%	November 2017	13	13	11
R472 million at JIBAR + 1.25%	February 2018	24	25	21
R1,427 million at JIBAR + 1.30%	June 2018	74	75	63
R927 million at JIBAR + 1.45%	February 2019	48	-	-
R500 million at JIBAR + 1.45%	February 2019	26	-	-
R2,484 million at JIBAR + 1.45%	May 2019	129	-	-
R90 million at JIBAR + 1.45%	February 2020	5	5	4
R80 million at JIBAR + 2.15%	April 2020	4	4	4
R476 million at JIBAR + 1.55%	November 2020	25	-	21
R830 million at JIBAR + 1.80%	February 2021	43	-	-
R1,468 million at JIBAR + 1.80%	May 2021	76	-	-
R650 million at JIBAR + 1.30%	June 2021	33	34	29
R12 million at JIBAR + 1.55%	February 2022	1	1	1
R270 million at JIBAR + 2.00%	February 2023	14	-	-
R528 million at JIBAR + 2.00%	May 2023	27	-	-
R1,980 million at JIBAR + 2.00%	February 2025	103	105	88
R500 million at JIBAR + 2.10%	April 2026	26	27	22
R750 million at JIBAR + 2.25%	May 2026	39	-	-
		1,056	744	589
Less: floating rate notes held by other Group companies		(3)	(22)	(18)
Total floating rate notes		1,053	722	571

All floating rate unsecured senior debt are non-qualifying for the purposes of regulatory tiers of capital.

F: Financial assets and liabilities continued

F3: Borrowed funds continued

(a) Senior debt securities and term loans continued

(ii) Fixed rate notes (net of Group holdings)

				£m
	Maturity date	At 30 June 2016	At 30 June 2015	At 31 December 2015
Non-banking - Old Mutual plc
£112 million at 7.125%	October 2016	112	112	112
Total non-banking fixed rate unsecured senior debt		112	112	112
Banking - Nedbank Fixed rate unsecured senior debt
R3,244 million at 10.55%	Repaid	-	175	-
R1,137 million at 9.36%	Repaid	-	61	51
R151 million at 6.91%	July 2016	8	8	7
R1,273 million at 11.39%	September 2019	70	72	60
R380 million at 9.26%	June 2020	20	20	17
R1,888 million at 8.92%	November 2020	98	100	83
R855 million at 9.38%	March 2021	45	46	38
R500 million at 9.29%	June 2021	26	26	22
R215 million at 8.79%	February 2022	11	12	10
R280 million at 9.64%	June 2022	14	15	12
R952 million at 10.07%	November 2023	49	-	42
R391 million at 9.73%	March 2024	21	21	18
R660 million at zero coupon	October 2024	14	14	11
R2,607 million at 9.44%	February 2025	138	141	118
R884 million at 10.685%	November 2025	46	-	39
R800 million at 9.95%	April 2026	42	43	36
R2,000 million at 10.63%	July 2027	107	-	92
R1,739 million at 10.36%	June 2026	90	92	77
R250 million at 10.66%	February 2023	13	-	-
R417 million at 10.68%	May 2021	22	-	-
R360 million at 11.15%	May 2026	19	-	-
R666 million at 10.935%	November 2027	35	-	30
		888	846	763
Less: Fixed rate notes held by other Group companies		-	(8)	(3)
Total banking fixed rate unsecured senior debt  (net of    Group holdings)		888	838	760
Total fixed rate notes		1,000	950	872

All fixed rate notes are non-qualifying for the purpose of regulatory tiers of capital.

(iii) Term loans

				£m
	Maturity date	At 30 June 2016	At 30 June 2015	At 31 December 2015
Emerging Markets Floating rate loans
KES550 million at KBRR + 4.87%1	Repaid	-	4	-
$7 million at 3m LIBOR + 7.50%2	Repaid	-	-	5
$5 million at 3m LIBOR + 7.50%2	Repaid	-	-	3
$5 million at 3m LIBOR + 7.50%2	Repaid	-	-	3
R1,500 million at JIBAR + 2.95%1	August 2017	82	84	70
R800 million at JIBAR + 2.75%1	July 2018	41	-	35
KES451 million at KBRR + 3.87%1	March 2019	1	3	3
Emerging Markets Fixed rate loans
KES170 million at 14.00% to 14.75%1	Repaid	-	1	-
KES1,000 million at 12.50%2	Repaid	-	-	7
KES175 million at 11.70%1	Repaid	-	1	-
$20 million at 8.75%2	Repaid	-	-	11
KES225 million at 11.70%1	August 2017	-	1	1
KES2,000m at 13.00%2	July 2017	16	-	13
KES101 million at 13.00%1	June 2018	1	-	-
KES101 million at 13.50%1	June 2018	1	-	-
KES607 million at 12.50%1	December 2018	5	-	-
KES411 million at 11.50%1	April 2020	3	-	3
KES1,183 million at 9.20%1	September 2020	7	-	8
KES150 million at 5.00%1	July 2022	1	1	1
KES466 million at 9.83%1	July 2022	1	-	2
$6 million at 8.10%1	August 2017	2	3	3
$19 million at 8.10%1	September 2017	7	10	9
$10 million at 8.10%1	May 2020	5	6	5
$19.57 million at 8.75%2	August 2022	12	-	-
$5 million at 11.00%1	September 2022	3	3	3
$5 million at 6.50%2	June 2023	3	-	3
$5 million at 6.50%2	June 2023	4	-	3
$10 million at 10.00%1	December 2023	7	6	7
$1 million at 5%1	December 2023	1	-	-
Total term loans and other loans		203	123	198
Analysed as:
1 Banking		168	123	150
2 Non-banking		35	-	48
Total term loans and other loans		203	123	198

F: Financial assets and liabilities continued

F3: Borrowed funds continued

(b) Revolving credit facilities

				£m
	Maturity date	At 30 June 2016	At 30 June 2015	At 31 December 2015
Non-banking - Institutional Asset Management
$50 million (30 June 2015: $145 million; 31 December 2015: $90 million) drawn of a $350 million facility at USD LIBOR + 1.25%	October 2019	38	92	61
Banking - Emerging Markets
R1,200 million facility at 3 month JIBAR + 2.95%	Repaid	-	25	-
R500 million fully drawn at 3 month JIBAR + 3.10%	Repaid	-	26	-
		-	51	-
Total revolving credit facilities		38	143	61

The Group has access to a £800 million multi-currency revolving credit facility available to the Old Mutual plc. £727 million of the facility matures in August 2020 and a £73 million facility matures in August 2019. There is an optional further one year extension in August 2016. At 30 June 2016 none of this facility was drawn.

In December 2015, Emerging Markets obtained access to a R5,250 million revolving credit facility which matures in December 2018 with an option to renew for a further year. At 30 June 2016, none of this facility was drawn.

(c) Mortgage-backed securities (net of Group holdings)

					£m
	Tier	Maturity date	At 30 June 2016	At 30 June 2015	At 31 December 2015
Banking - Nedbank
R161 million (class A2) at JIBAR + 1.25%	Tier 2	October 2039	3	14	7
R900 million (class A3) at JIBAR + 1.54%	Tier 2	October 2039	47	48	40
R110 million (class B) at JIBAR + 1.90%	Tier 2	October 2039	6	6	5
R558 million at JIBAR + 1.20%	Tier 2	February 2042	23	27	24
R100 million at JIBAR + 1.45%	Tier 2	February 2042	5	5	4
R680 million at JIBAR + 1.55%	Tier 2	February 2042	35	36	30
R80 million at JIBAR + 2.20%	Tier 2	February 2042	4	4	4
R65 million at JIBAR + 3.00%	Tier 2	February 2042	3	3	3
			126	143	117
Less: Mortgage backed securities held by other Group companies			(22)	(24)	(20)
Total mortgage-backed securities			104	119	97

(d) Subordinated debt securities (net of Group holdings)

					£m
	Tier	Maturity date	At 30 June 2016	At 30 June 2015	At 31 December 2015
Banking - Nedbank
R1,000 million at 10.54%	Tier 2	Repaid	-	54	-
$100 million at 3 month USD LIBOR	Tier 2 (secondary)	March 2022	75	64	69
R2,000 million at JIBAR + 0.47%	Tier 2	July 2022	104	106	89
R1,800 million at JIBAR + 2.75%	Tier 2	July 2023	94	96	80
R1,200 million at JIBAR + 2.55%	Tier 2	November 2023	62	63	53
R450 million at JIBAR + 10.49%	Tier 2	April 2024	24	24	20
R1,737 million at 3 month JIBAR + 2.55%	Tier 2	April 2024	91	93	78
R300 million at JIBAR + 2.75%	Tier 2	October 2024	16	16	13
R225 million at JIBAR +2.75%	Tier 2	January 2025	12	12	10
R1,624 million at JIBAR + 3.5%	Tier 2	July 2025	86	85	73
R407 million at 11.29%	Tier 2	July 2025	22	21	19
			586	634	504
Less: Banking subordinated debt securities held by other Group companies			(46)	(8)	(16)
Banking subordinated securities			540	626	488
Non-banking - Old Mutual plc
£500 million at 8.00%	Lower Tier 2	June 2021	543	568	536
£450 million at 7.88%1	Lower Tier 2	November 2025	448	-	450
Non-banking - Emerging Markets2
R3,000 million at 8.92%	Lower Tier 2	Repaid	-	157	-
R300 million at 9.26%	Lower Tier 2	November 2024	15	15	12
R700 million at 3 month JIBAR + 2.20%	Lower Tier 2	November 2024	36	37	31
R537 million at 3 month JIBAR  + 2.30%	Lower Tier 2	March 2025	28	28	24
R425 million at 9.76%	Lower Tier 2	March 2025	21	22	17
R1,288 million at 3 month JIBAR + 2.25%	Lower Tier 2	September 2025	66	-	57
R409 million at 10.32%	Lower Tier 2	March 2027	20	21	16
R568 million at 10.90%	Lower Tier 2	September 2027	29	-	23
R1,150 million at 10.96%	Lower Tier 2	March 2030	56	35	46
R623 million at 11.35%	Lower Tier 2	September 2030	31	-	25
			302	315	251

¹        On 3 November 2015, Old Mutual plc issued £450 million Dated Tier 2 Subordinated Notes under its existing £5,000 million Euro Note Programme. The notes have a maturity date of 3 November 2025 and pay interest semi-annually on 3 May and 3 November at a fixed rate of 7.88% per annum up to and including the maturity date.

²        All callable subordinated debt securities have a first call date five years before the maturity date.

G: Non-financial assets and liabilities

G1: Goodwill and other intangible assets

Analysis of goodwill and other intangible assets

This note shows the movements in cost, amortisation and impairment of goodwill and other intangible assets for the six months ended 30 June 2016 and year ended 31 December 2015.

										£m
	Goodwill		Present value of acquired in-force business development costs		Software development costs		Other intangible assets		Total
	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015
Cost
Balance at beginning of the period	3,129	2,756	982	1,107	598	669	710	402	5,419	4,934
Acquisitions through business    combinations1	3	467	-	-	-	-	3	308	6	775
Purchase price adjustments	-	22	-	-	-	-	-	-		22
Additions	-	-	-	-	47	72	-	9	47	81
Disposal of interests in subsidiaries	-	(41)	-	(125)	-	(1)	-	(4)	-	(171)
Disposals or retirements	-	-	-	-	-	(8)	-	(1)	-	(9)
Transfer to non-current assets    held for sale	(132)	(29)	(76)	-	-	-	-	-	(208)	(29)
Foreign exchange and other movements	223	(46)	6	-	96	(134)	14	(4)	339	(184)
Cost at end of the period / year	3,223	3,129	912	982	741	598	727	710	5,603	5,419
Amortisation and impairment losses
Balance at beginning of the period	(617)	(624)	(751)	(792)	(403)	(449)	(372)	(306)	(2,143)	(2,171)
Amortisation charge for the period	-	-	(21)	(58)	(24)	(49)	(24)	(70)	(69)	(177)
Impairment losses	(44)	(23)	-	-	-	-	-	-	(44)	(23)
Disposal of interests in subsidiaries	-	-	-	102	-	1	-	-	-	103
Disposals or retirements	-	-	-	-	-	7	-	1	-	8
Transfer to non-current assets    held for sale	44	29	72	-	-	-	-	-	116	29
Foreign exchange and other movements	(42)	1	(5)	(3)	(65)	87	(9)	3	(121)	88
Accumulated amortisation and    impairment losses at end of    the period / year	(659)	(617)	(705)	(751)	(492)	(403)	(405)	(372)	(2,261)	(2,143)
Carrying amount
Balance at beginning of the period	2,512	2,132	231	315	195	220	338	96	3,276	2,763
Balance at end of the period	2,564	2,512	207	231	249	195	322	338	3,342	3,276

¹          Goodwill acquired through business combinations of £3 million relates to the acquisition of AAM Advisory. Refer to note A2 for further information.

The net carrying amount of present value of acquired in-force business at the 30 June 2016 principally comprises £204 million (31 December 2015: £227 million) relating to the Skandia business acquired during 2006, which is due to be amortised over a further six to eleven years.

The net carrying amount of other intangible assets at 30 June 2016 principally comprises:

Old Mutual Wealth:

§  £236 million (December 2015: £249 million) relating to distribution channels that will be amortised over a further nine years.

§  £32 million (December 2015: £35 million) relating to mutual fund and asset management relationship assets that will be amortised over a further seven years.

§  £11 million (December 2015: £13 million) relating to brand that will be amortised over a further four years.

Emerging Markets:

§  £10 million (December 2015: £12 million) relating to the loan book of Old Mutual Finance Ltd that will be amortised over a further 14 months.

§  £19 million (December 2015: £17 million) relating to the UAP brand, which is not being amortised.

Management performed an impairment test on the £169 million goodwill recognised as a result of the acquisition of UAP in 2015. The goodwill was allocated to the Old Mutual Southern and East Africa (OMSEA) cash generating units. The impairment test indicated that the goodwill balance was not impaired at 30 June 2016. The assumptions used in performing the goodwill impairment test are subjective and include a risk adjusted discount rate of 19.12%, forecasted and extrapolated cash flows and a terminal rate of 4.5%. The Group will continue to monitor developments and their possible impact on the value in use of OMSEA and any possible impairment to the carrying value in the second half of 2016.

The recoverability of this goodwill balance is dependent on OMSEA realising the expected synergies from the acquisition of UAP which are embedded in the forecasted cash flows.

Segmental analysis of goodwill and other intangibles

The following table shows a segmental analysis of the carrying amounts of goodwill and other intangible assets, together with amortisation and impairment charges, by operating segment at 30 June 2016 and 31 December 2015:

						£m
	Goodwill and intangible assets (carrying amount)		Amortisation		Impairment
	2016	2015	2016	2015	2016	2015
Emerging Markets	468	415	9	28	-	-
Old Mutual Wealth	1,450	1,620	41	112	44	-
Nedbank	466	378	18	37	-	-
Institutional Asset Management	958	863	-	-	-	23
	3,342	3,276	68	177	44	23

H: Other Notes

H1: Contingent liabilities and commitments

The Group, in the ordinary course of business, enters into transactions that expose it to tax, legal and business risks. Provisions are made for known liabilities that are expected to materialise. Possible obligations and known liabilities where no reliable estimate can be made or it is considered improbable that an outflow would result are reported as contingent liabilities in accordance with IAS 37: 'Provisions, Contingent Liabilities and Contingent Assets'.

Contingent liabilities - tax

The Revenue authorities in the principal jurisdictions in which the Group operates (South Africa, the United Kingdom and the United States) routinely review historic transactions undertaken and tax law interpretations made by the Group. The Group is committed to conducting its tax affairs in accordance with the tax legislation of the jurisdictions in which they operate. All interpretations made by management are made with reference to the specific facts and circumstances of the transaction and the relevant legislation.

There are occasions where the Group's interpretation of tax law may be challenged by the Revenue authorities. The financial statements include provisions that reflect the Group's assessment of liabilities which might reasonably be expected to materialise as part of their review. The Board is satisfied that adequate provisions have been made to cater for the resolution of tax uncertainties and that the resources required to fund such potential settlements are sufficient.

Due to the level of estimation required in determining tax provisions amounts eventually payable may differ from the provision recognised.

Contingent liabilities - implications of the Managed Separation strategy

The Group routinely monitors and reassesses contingent liabilities arising from matters such as litigation, and warranties and indemnities relating to past acquisitions and disposals.  The announcement of the Managed Separation strategy on 11 March 2016 does not affect the nature of such items, however it is possible that the Group may seek to resolve certain matters as part of the implementation of the Managed Separation strategy. 

Nedbank litigation

There are a number of legal or potential claims against Nedbank Group Ltd and its subsidiary companies, the outcome of which cannot at present be foreseen.

Consumer protection

Old Mutual is committed to treating customers fairly and supporting its customers in meeting their lifetime goals and treating customers fairly is central to how our businesses operate.  We routinely engage with customers and regulators to ensure that we meet this commitment, but there is the risk of regulatory intervention across various jurisdictions, giving rise to the potential for customer redress which can result in retrospective changes to policyholder benefits, penalties or fines.  The Group monitors the exposure to these actions and makes provision for the related costs as appropriate.

On 2 March 2016, the Financial Conduct Authority (FCA) notified Old Mutual Wealth that one of its subsidiaries, Old Mutual Wealth Life Assurance Limited, would be investigated by the Enforcement Division of the FCA. This has arisen following an industry-wide thematic project on "Fair treatment of long-standing customers of life insurers" by the FCA in 2014, which focused on our UK closed book of insurance products. The appointment of investigators does not itself mean that the FCA has determined that rule breaches and/or other contraventions or offences have occurred, and at this stage it is not possible to assess the outcome and, by extension, whether the matter will have financial consequences for Old Mutual Wealth.

H: Other notes continued

H2: Events after the reporting date

Investment in Ecobank Transnational Inc. (ETI)

Subsequent to the reporting date, 30 June 2016, the Nigerian naira continued to depreciate against the dollar and the market value of the Group's investment in ETI, based on its quoted share price in a thinly traded market, has decreased further. These events are not indicative of conditions that existed at the reporting date. The Group will continue to monitor developments and their possible impact on the value in use of the investment in ETI and any possible impairment to the carrying value in the second half of 2016.

OM Asset Management plc Notes Issues

On 27 July 2016, OM Asset Management plc (OMAM) completed the issuance of a combined $400 million of Senior Unsecured Notes in the Institutional and Retail markets. The debt is comprised of two tranches: OMAM's $275 million 4.80% 10-Year Institutional Debt Issuance and OMAM's $125 million 5.13% 15-Year (with a call option available after three years) Retail Debt Issuance. Both tranches are registered and will be listed on the New York Stock Exchange.

Disposal of Old Mutual Wealth Italy

On 9 August 2016, the Group announced that it has agreed to sell Old Mutual Wealth Italy, part of the Old Mutual Wealth business, to ERGO Italia, owned by Cinven. The consideration for the transaction is €278 million in cash, plus interest to completion. The transaction is subject to regulatory approval and is expected to complete within the next six months.

A goodwill impairment loss of £44 million has been recognised in profit or loss as the net asset value of the business disposed of exceed the expected net proceeds. The related assets and liabilities have been classified as held for sale. Refer to note I2 for more information.

I: Discontinued operations and disposal groups held for sale

I1: Discontinued operations

Income statement from discontinued operations
			£m
	Six months ended 30 June  2016	Six months  ended 30 June 2015	Year ended 31 December 2015
Loss on disposal	-	(21)	(21)
Loss before tax from discontinued operations	-	(21)	(21)
Income tax credit	-	-	-
Loss after tax from discontinued operations	-	(21)	(21)

The loss on disposal recognised during the six months ended 30 June 2015 and year ended 31 December 2015 related to the settlement of litigation arising on the disposal of US Life in 2011, following a court ruling in favour of the plaintiff on the main matter in dispute.

I2: Assets and liabilities held for sale

			£m
	At 30 June  2016	At 30 June 2015	At 31 December 2015
Assets held for sale
Emerging Markets	17	212	84
Old Mutual Wealth	6,081	902	4
Institutional Asset Management	-	-	35
Total assets held for sale	6,098	1,114	123
Liabilities held for sale
Old Mutual Wealth	5,853	833	-
Institutional Asset Management	-	-	12
Total liabilities held for sale	5,853	833	12

Emerging Markets

Current and prior period transactions

Emerging Markets has classified £17 million (June 2015: £212 million; December 2015: £84 million) of investment properties as held for sale. These transactions are expected to complete in the next 12 months. The investment properties form part of the policyholder assets and therefore have no impact on profit or loss of the Group.

Old Mutual Wealth

Current period transactions

On 9 August 2016, the Group announced that it has agreed to sell Old Mutual Wealth Italy, part of the Old Mutual Wealth business, to ERGO Italia, owned by Cinven. The consideration for the transaction is €278 million in cash, plus interest to completion. The transaction is subject to regulatory approval and is expected to complete within the next six months.

A goodwill impairment loss of £44 million has been recognised in profit or loss as the net asset value of the business disposed of exceed the expected net proceeds.

At 30 June 2016, the total value of the assets and liabilities reclassified as held for sale in the consolidated statement of financial position were £6,077 million and £5,853 million respectively. The principal financial assets and liabilities included as held for sale are investments and securities of £5,783 million and investment contract liabilities of £5,758 million, both of which are classified as Level 1 in terms of the fair value hierarchy.

Old Mutual Wealth has also identified property, plant and equipment of £4 million (June 2015: £4 million; December 2015: £4 million) as held for sale.

Prior period transactions

At 30 June 2015, Old Mutual Wealth identified total assets of £898 million and total liabilities of £833 million as held for sale in relation to the disposal of Skandia Leben AG. This transaction completed on 30 September 2015.

Institutional Asset Management

Prior period transactions

At 31 December 2015, Institutional Asset management identified total assets of £35 million and total liabilities of £12 million as held for sale in relation to the disposal of Rogge Global Partners plc. This transaction completed on 31 May 2016.

 

END

 

 

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