Trading Statement

Old Mutual PLC
16 May 2003



OLD MUTUAL PLC



AGM Trading Statement



This announcement contains a report from the Board of Old Mutual plc (the
Company) on trading in the four months ended 30 April 2003.  Nedcor Limited, the
Company's separately JSE-listed banking subsidiary, is also giving concurrently
with this release a detailed update on its own trading.  The full text of
Nedcor's statement is available on the Company's website, www.oldmutual.com.



Old Mutual's trading in the first four months of 2003 has followed the patterns
of the last quarter of 2002 with solid performance in difficult trading
conditions.  Lower equity markets, particularly in South Africa, and a
strengthening Rand have again been the backdrop.  Our capital remains strong.
Total assets have held up well, with funds under management at our US asset
management business maintained at the year end level, and our embedded value per
share has increased from 104p at the year end to 111p at 30 April 2003.



Our US life business achieved strong earnings growth, as profit from sales made
last year continued to flow through.  This earnings growth was offset by lower
profits in our equity-oriented businesses and unrealised translation losses at
Nedcor.  These unrealised losses have reduced to R300 million at 15 May 2003.
Due to this, overall, earnings were lower in Rand, but the effect was dampened
in Sterling.



Total life sales on an Annual Premium Equivalent (APE) basis for the four months
to 30 April 2003 were £166 million, compared to £168 million in the equivalent
period in 2002.  Our US life sales on an APE basis were lower than last year at
£85 million, compared to £103 million in the equivalent period in 2002.  Volumes
are being controlled at levels lower than 2002 by conservative pricing, in a
market where some competitors are being more aggressive.  In South Africa, new
business APE was flat at £81 million.  South African recurring premiums have
been satisfactory, but retail single premiums, affected by the poor investment
climate for equities, are some 21% lower than last year.  Group single premiums,
always lumpy, have benefited from the transfer of Nedcor's multi-management
business to Old Mutual South Africa.



Life assurance margins were somewhat lower.  In the USA, we had to give back
some margin following the intentional slowdown in sales at the end of last year,
against the background of aggressive competitor behaviour.  In South Africa,
product level margins have been firm.  A different product mix has meant that
our overall margins have returned to our target range, as our group business
multi-manager sales have a lower margin than with-profit annuities, which were a
major source of sales last year.



In the USA, we have been successful in securing positive net fund inflows of
$1.3 billion in the asset management business (including $0.5 billion from the
life business).  Our distribution efforts have continued to deliver good
results, but generally at lower margins due to the increasing proportion of
fixed interest business.  South African life assurance customers have been
deterred by poor local equity markets and low absolute returns, and net cash
flow from customers was again negative.



Nedcor's earnings were lower than those for the comparative period in 2002.  Its
operating result was adversely impacted by significant losses on the translation
of offshore assets, reflecting Rand strength during the period, and tough market
conditions.  Organic growth in advances has been in line with credit extension
and interest margins have been maintained, but the poor market for private
equity and investment banking assets has held back non-interest revenue.  The
integration of BoE is on track and on target to achieve total merger benefits of
R905 million by 2006.



Investment performance remains good in the US institutional businesses and has
improved at OMAM(UK) and OMAM(SA).



Gerrard's trading activity remained robust during the period.  Expenses were
lower, and have been constrained generally - this is a key focus at present in
all our businesses.



Capital

During the past week, we have announced the successful issue of $750 million
Guaranteed Cumulative Perpetual Preferred Securities, yielding 8% p.a. at issue,
as part of our continuing financing programme.  This issue strengthens our
capital base, reduces dependence on short term debt and diversifies our sources
of funding.  Its success demonstrates the increasing acceptance of our name and
credit among investors in the credit financing markets.



Holders of $636 million of our $650m Convertible Bonds did not exercise their
put option, and these Bonds remain outstanding until maturity in May 2005.



Outlook

Currency fluctuations and equity market movements have affected the performance
of our Group and we are not expecting trading conditions to change dramatically
over the immediate future.  We remain well capitalised.  This, together with our
diversity, our focus on customer segments, the strength of our market positions
and balance sheet give us confidence for the rest of the year.



ENQUIRIES:


Old Mutual plc
James Poole     (UK)                                 Tel: [phone]


Nad Pillay        (SA)                               Tel: [phone]

                                                     Tel: [phone]


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



Julian Roberts, Group Finance Director, will be hosting a conference call for
analysts and investors at 8.30 a.m. GMT (9.30 a.m. South African time) this
morning.  The call will include a brief introduction followed by an opportunity
for questions.  Details of the dial-in and access arrangements were released
yesterday.



                                                                     16 May 2003

Further details on operating businesses



South Africa - Life Assurance and Asset Management



Trading conditions in South Africa have been challenging for our South African
life assurance and asset management businesses during the period.  The FTSE/JSE
Africa ALSI declined by 19% between 1 January and 30 April 2003, whilst the Rand
has appreciated by 15% against Sterling in the same period putting downward
pressure on the value in Rand terms of international assets held in South
Africa.  As a result, average assets under management were lower than in the
corresponding period last year, which negatively impacted operating profit,
particularly in Rand.



Individual business sales APE of R786 million and Group business sales APE of
R274 million for the first four months were 5% lower and 14% higher,
respectively, than in the equivalent period in 2002.  While individual recurring
premium sales were higher than last year, individual single premium sales came
under pressure due to the poor investment climate caused by the currency and
equity markets.  Group single premiums were 27% up on last year.  This was
largely due to the acquisition of lower margin 'multi-manager' new business from
the Nedcor group.  New business from our bancassurance initiatives was in line
with the equivalent period last year.



The post-tax value of new business for the first four months of R168 million, at
a margin of 16%, was 71% of that achieved in the equivalent period in 2002.  The
reduction in value and margin was mainly due to an expected fall-off in volumes
of high margin with-profit annuity business.  In addition, the weak single
premium market and continued investment in distribution also had an impact.



Total South African policyholder funds under management were R165 billion at 30
April 2003. This was 7% lower than at 31 December 2002 and was almost entirely
due to the adverse performance of markets, both locally and internationally.



During the first part of 2003, OMAM(SA)'s performance for clients continued to
sustain the good relative investment results apparent at the end of 2002.
Specialist equity mandates have continued to perform well, with most being ahead
of benchmarks for the twelve month period to the end of March 2003.



Nevertheless, the negative equity markets have meant that our customers' returns
are at very low levels.  We remain comfortable that equities offer the best
returns over the long run, and we continue to invest the preponderance of our
customers' assets in those markets.  However, the current downdraught is causing
considerable customer discomfort.





South Africa - Banking



Nedcor's earnings for the period were lower than those for the comparable period
in 2002.  Organic growth in advances was in line with credit extension and
interest margins were maintained.  Net interest income grew accordingly.
Non-interest revenue was down as a result of the poor market for private equity
and investment banking assets and for generating advisory fees and trading
profits.  Credit quality, including unsecured microloans, has been satisfactory
despite the high interest rate environment, and the charge against income for
provisions is stable.  Expense growth is being progressively reduced as the
integration of BoE proceeds, but the cost-to-income ratio at this stage has
increased as a result of lower revenue growth.  Operating profit was also
adversely impacted by unrealised losses on the translation of offshore assets
into Rand.



The integration of BoE into the Nedcor group is proceeding in line with the
published timetable and is on track to realise the targeted synergistic
benefits.



The complex new accounting standard, AC133, which deals with the valuation and
recognition of financial instruments and a new credit provisioning policy, is
presently being implemented in South Africa.  Nedcor will report changes caused
by the new standard as part of its interim results.  Nedcor's capital adequacy
is expected to remain sound following the implementation of AC133.



AC133 is based on International Accounting Standard 39, which Old Mutual plc is
not allowed to implement until 2005.  In consolidating Nedcor's results for 2003
and 2004, Old Mutual will therefore be required to reverse out some of the
consequences of applying AC133 in Nedcor's own published results.





South Africa - General Insurance



Overall trading has been robust at Mutual & Federal Insurance Company Limited,
our 51% owned general insurance subsidiary, despite its underwriting result
being adversely impacted by storm-related claims and a number of industrial
fires early in the year.





USA - Asset Management



Our US asset management business continued to demonstrate resilience to the
general investment market conditions in the USA through the diversity of its
firms.  Although our overall weightings in all fund categories remain well
represented, the asset mix of our Group's US funds under management continued to
shift toward fixed income products.



Funds under management at 30 April 2003 were $127.8 billion, compared to $127.0
billion at the beginning of the year.  Net fund inflows for the first four
months of 2003 amounted to $1.3 billion (including $0.5 billion from our US life
business).  Positive fund inflows in the current market conditions were
encouraging, and reflect the Group's attractive mix of focused asset management
capabilities and the continuing good underlying performance of the core
businesses.



Further disposals in 2003 of non-core firms have resulted in $3.3 billion of
funds under management being divested by the Group.



Overall, our US asset management businesses continue to produce competitive
relative investment performance for their clients.  More than 85% of strategies
managed for institutional clients have outperformed their respective benchmarks
over five years on an asset-weighted basis.





USA - Life Assurance



Trading conditions were more difficult for our US life business, Fidelity &
Guaranty Life, during the first four months of 2003 than in 2002. Uncertainty
around the impact of the Iraq war and instability in the interest rate
environment had a negative impact on the profitability of new annuity business.
Volumes were controlled at levels lower than 2002 by conservative pricing in a
very fluid market where some competitors were being more aggressive.  Despite
these conditions, smoothed operating profit for the four months exceeded that
achieved in the equivalent period in 2002.



Total sales of $1.1 billion ($135 million on an APE basis) were achieved by the
business over the first four months of 2003, making this on a long term
perspective, a very successful period.  This represented, on an APE basis, 91%
of the sales it achieved in the equivalent period in 2002.  In our core
brokerage annuity market our share was maintained, in the life market our share
continued to grow, whilst in the institutional market our share was held down by
aggressive competitor pricing.  The pre-tax value of new business for the first
four months of 2003 was $20 million, at a margin of 14.8%.



Sage Life (Bermuda) Limited (now OMNIA Life (Bermuda)) was acquired in April
2003.  This new distribution channel provides an entry into the offshore
variable annuity market and establishes a presence with major bank customers
offshore, bringing greater stability to new business volumes and profitability.



On a funds flow basis, the Group's US life business has attracted $0.9 billion
in net policyholder cash inflows during the first four months of 2003.  Since
acquisition, US life has generated net policyholder cash inflows totalling more
than $5.2 billion. During the same period the weighted average margin of US life
business was 23%.  Funds under management were $12 billion at 30 April 2003.



AM Best's rating for Fidelity & Guaranty Life was maintained as an 'A' .





UK



While market conditions in the UK continued to be difficult for asset and wealth
managers during the first four months of 2003, our businesses made good progress
in reducing their operating cost base and developing their product offerings to
clients.  The sale of three non-core businesses towards the end of 2002 has
enabled management to focus on operational efficiencies whilst pursuing new
business initiatives.



At Gerrard, market conditions had an impact on revenues during the early part of
the year.   These effects were, however, largely offset by successful revenue
enhancement initiatives and controlled expense reductions.  The average level of
the FTSE 100 Index for the first four months was 19% lower than in the
equivalent period in 2002, which directly impacted on fee income.  Trading
activity remained relatively robust in spite of fewer opportunities to manage
client capital gains tax positions.  Funds under management at 30 April 2003
were £12.1 billion compared to £12.0 billion at the beginning of the year,
principally reflecting market movements.



Old Mutual Asset Managers (UK) (OMAM(UK)) has continued to produce excellent
investment performance.  This was recognised in the April 2003 edition of
Professional Adviser, where the UK Select Smaller Companies Fund achieved first
place in the Hot 100 list.   OMAM(UK)'s more diversified UK Smaller Companies
Fund, Select Large Cap Fund and Corporate Bond Fund also appeared in the top
ten.  In March, two new hedge funds were launched by OMAM(UK), the UK Specialist
Equity Fund and the UK Large Cap Fund, which between them have already attracted
over $40 million of new funds.



GNI FM, our specialist hedge fund manager, was recently re-launched as Bright
Capital.



Selestia continued to grow rapidly, generating £35 million of sales in the first
quarter of 2003 compared to £65 million for the whole of 2002.





Forward looking statements



This announcement contains certain forward looking statements with respect to
the financial condition and results of operations of Old Mutual plc and its
group companies, which by their nature involve risk and uncertainty because they
relate to events and depend on circumstances that may occur in the future.
Factors that could cause actual results to differ materially from those in the
forward looking statements include, but are not limited to, global, national and
regional economic conditions, levels of securities markets, interest rates,
credit or other risks of lending and investment activities, and competitive and
regulatory factors.





Interim results



Old Mutual plc expects to announce its interim results for the six months ending
30 June 2003 on 7 August 2003.  It is expected that Nedcor Limited will announce
its interim results on 29 July 2003.




                      This information is provided by RNS
            The company news service from the London Stock Exchange