Trading Update

Old Mutual PLC
18 November 2003


OLD MUTUAL PLC

Trading update

This announcement contains a report from the Board of Old Mutual plc (the
Company) on trading during the ten months ended 31 October 2003 and the outlook
anticipated for the year ending 31 December 2003.  Nedcor Limited, the Company's
separately JSE-listed banking subsidiary, gave a detailed update on its own
trading on 17 November 2003.  The full text of Nedcor's statement is available
on the Company's website, www.oldmutual.com.


Old Mutual's earnings in Sterling since the half year have been at a similar
level overall to the first half of the year, with disappointing developments at
Nedcor being offset by solid performance elsewhere.  Trading has benefited from
the improvement in stock markets around the world, and early signs of a return
to stable economic conditions. The South African economy has made steady
progress and the Rand has been strong. Our embedded value per share reduced
marginally from 106p at 30 June 2003 to 105p at 31 October 2003.


Life assurance margins have started to recover after a difficult first half,
particularly in our US life business, where sales volumes were boosted by
expansion of its distribution capability and product range.


Total life sales on an Annual Premium Equivalent (APE) basis for the ten months
to 31 October 2003 were £410 million, compared to £507 million for the
equivalent period in 2002.  Our US new business APE of $315 million was lower
than in the equivalent period last year ($417 million), although sales during
2003 are still expected to be the second highest annual total in the history of
Fidelity & Guaranty Life (F&G Life).  In South Africa, including Old Mutual
International (OMI), new business APE at R2,700 million compared to R3,040
million in the same period last year, reflecting reduced single premium sales,
which were affected by the local stock market.  This was offset by increased
market share in recurring premium sales.


Against a background of industry-wide lower volumes and margins, our life
businesses in both the USA and South Africa have launched new products to take
advantage of their local market conditions and consumer preferences.  In South
Africa, retail absolute return products have been launched for risk-averse
customers.  In the USA, sales of equity indexed annuity and life products have
grown strongly, as consumer confidence has returned with the recovery of equity
markets.


Overall, cash flows in our asset management businesses have been good,
stimulated by improved investment performance.  In the USA, funds under
management at our US asset management business of $142.7 billion at the end of
the third quarter have benefited from rising markets and improving new business
volumes. We were successful in securing positive net fund inflows of $3.1
billion during the third quarter, reflecting our firms' diverse product
offerings, the strengthened sales force and client retention initiatives.
Margins improved gradually.  South African client retention initiatives and
third party fund inflows have returned net customer cash flows into positive
territory.


Investment performance has remained good in our US institutional businesses and
has improved steadily in our US retail businesses. As announced on 13 November
2003, we have changed the management of our Pilgrim Baxter subsidiary (PBA)
after governance failures there.


In October we announced that we had reached agreement for the sale of our UK
private client stockbroking business, Gerrard, for a consideration of £210
million payable in cash at completion. Funds under management at this business
were £12.2 billion at 31 October 2003. Completion of the sale remains subject to
receipt of regulatory consents, which we expect before the end of the year.


The operating result for the period of Nedcor, our 53% owned banking subsidiary,
was adversely affected by losses on the translation of offshore assets
(reflecting Rand strength in the period), margin decline as a result of holding
long assets as interest rates declined, and a poor market for investment banking
business.  Consequently its headline earnings per share for the year are now
expected to be substantially (more than 30%) lower than last year's.


We welcome the appointment of Tom Boardman as the new Chief Executive of Nedcor
and consequently to the Old Mutual management team.  We also welcome the five
point plan which Nedcor has announced to remedy its poor performance. The plan
calls for a profit recovery plan to be presented to the Nedcor board in January
(and will be presented to investors with final 2003 results in February), for a
commitment to publicly stated synergy targets for the BoE acquisition, for focus
on open and transparent culture and for improvements in customer service levels.
Early steps in this plan have been completed, including the announcement of a
new senior management structure for Nedcor.


As indicated in its trading statement yesterday, Nedcor expects to reduce its
dividend as part of its positioning for recovery and Old Mutual has agreed that
it will accept its final dividend in 2004 in scrip if Nedcor makes that offer.


We welcome the recent publication of the Financial Sector Charter in respect of
Black Economic Empowerment (BEE) in South Africa.  Our South African businesses
were actively involved in the establishment of the Charter, which sets out
targets for black involvement in financial services companies, and they have
developed a balanced scorecard approach to monitor their achievement against BEE
targets.


Outlook


While there are challenges in bringing Nedcor back to target profitability, we
have confidence in the new team and the underlying strength of the Nedcor
business. Around the world, our businesses have produced good investment
performance for their customers and we have made significant investment in our
distribution capability. As a result, in an environment of improving equity
markets, we expect to be able to make progress in each of our businesses in the
coming months, and to take strategic opportunities as they become available.



ENQUIRIES:


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

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


Julian Roberts, Group Finance Director, will host a conference call for analysts
and investors at 9.00 a.m. London time (11.00 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 on
11 November 2003.

                                                                18 November 2003



Further details on operating businesses

South Africa - Life Assurance and Asset Management

Trading conditions have been challenging for our South African life assurance
and asset management businesses.  Operating profit before long term investment
return for the ten months ended 31 October 2003 was higher than for the
equivalent period last year, despite being adversely affected by lower levels of
average assets.


Individual Business sales APE, including OMI, of R2,125 million and Group
Business sales APE of R575 million for the ten months were 10% and 17% lower
than in the equivalent period in 2002.  Individual recurring premium sales,
including OMI, increased 6% over the prior period on the back of good Group
Schemes sales and risk business.  Single premium sales remained under pressure
due to the poor investment conditions caused by the volatile currency and equity
markets, and were down some 29% on the prior period.  In response, we repriced a
number of products and launched a range of new retail absolute return products
during August.  There was no significant growth in our sales force on a net
basis, despite our recruitment efforts. Losses of sales personnel resulted from
a strict application of our performance management process, as well as because
of the difficult investment climate.


The post-tax value of new business, including OMI, of R547 million for the ten
months was 71% of that achieved in the equivalent period in 2002, at a margin of
20%.  The reduction in value and margin was mainly due to the fall-off in
volumes of high margin with-profit annuity business and lower individual single
premium volumes.  Margins for the ten months have, however, improved from 18%
achieved in the six months to 30 June 2003.


Total South African client funds under management were R281 billion at 31
October 2003.  This was 8% higher than at 30 June 2003.  Net client cash flow
returned to positive territory as a result of customer retention initiatives and
third party fund inflows.


During the third quarter of 2003, OMAM(SA)'s performance for clients sustained
the good relative investment results that emerged during 2002. Specialist equity
mandates continued to perform well, with virtually all being ahead of benchmarks
for the twelve month period to 30 September 2003.


South Africa - Banking


As announced in Nedcor's trading statement issued on 17 November 2003, Nedcor's
results for the second half are expected to be substantially lower than in the
first half.


The main reasons for the lower earnings compared with the first half were:


a)      Net interest income in the period to 31 October 2003 of R5.6 billion was
lower than expected as a result of limited asset growth and the effect of
holding long assets during a period of continued reduction in interest rates;

b)      Non-interest revenue in the period to 31 October 2003 of R6.1 billion
continued to be well below expectations due to the unfavourable climate for
investment banking;

c)      The expense reduction drive initiated earlier in the year has not
yielded the full savings originally anticipated.


Nedcor's funding structure is currently improving through strong liquidity flows
and a gradual repricing of long dated deposits.  This, together with the
recovery programme announced in October and merger synergies, is expected to
help restore Nedcor's earnings in the future.  The Nedcor group remains
adequately capitalised, with a capital adequacy ratio in excess of the statutory
level of 10%.


Nedcor has also announced that it will discontinue the practice of paying a
portion of employee bonuses in shares, which resulted in the bonus charge being
accounted for as a dilution in earnings per share rather than as a direct charge
to the income statement.


South Africa - General Insurance


Mutual & Federal, our 51% owned South African general insurance subsidiary,
achieved growth in premium income of 15.0% for the ten months to 31 October
2003.  Provided there are no significant weather-related losses during the last
two months of the year, its continued focus on claims management should
contribute towards an improved underwriting performance for the year.



USA - Life Assurance



The macro-economic environment has been challenging for fixed annuity business
so far during 2003, as low interest rates have reduced the relative
attractiveness of interest-related products.  With equity markets having shown
signs of recovery, consumers have favoured variable annuity and equity indexed
annuity products.  The Old Mutual Financial Network (OMFN), for which F&G Life
is a flagship company, continued to adapt by designing and selling competitive
retail products.  The annuity product mix in the retail channel has shifted and
70% of current sales are attributable to equity indexed annuities. New life
products have been favourably received by the market and life premiums have
shown strong growth.



Total APE of $315 million was achieved over the ten months to 31 October 2003.
While this represented, on an APE basis, 77% of the sales achieved in the
equivalent period in 2002, sales were significantly higher than in any year
prior to the acquisition of F&G Life by Old Mutual.  The post-tax value of new
business for the ten months of $41 million, at a margin of 13%, was 66% of that
achieved in the equivalent period in 2002.



While the profitability of new business was lower than in 2002, the US life
business priced products prudently relative to competitors.  Its multiple
distribution channel strategy and multi-brand product range now include offshore
sales, reinsurance of small blocks of life business, and funding agreements with
the Federal Home Loan Bank, which have boosted its sales volumes.  OMNIA Life
(Bermuda) was acquired in April 2003.  This new distribution channel, which
targets offshore customers, has brought greater stability to new business
volumes and profitability as the market has focused less on interest rates and
more on the relative value of the US dollar. This distribution channel also
provides an important new conduit to large international banks.



On a funds flow basis, the Group's US life business attracted $1.7 billion in
net policyholder cash inflow for the first ten months of 2003.  Total assets
under management were $13.1 billion at 31 October 2003.



Old Mutual plc provided capital support of $94 million to the US life business
for business growth and regulatory benchmarks over the ten months to 31 October
2003.  AM Best's rating for F&G Life remains 'A'.



USA - Asset Management



Our US asset management business benefited from the continued recovery in
investment market conditions.  Funds under management at the end of the third
quarter were $142.7 billion, compared to $123.7 billion at the beginning of the
year after allowing for affiliate disposals of $3.3 billion.  The rise in equity
markets accounted for $14.0 billion of this increase, which also contributed
positively to the underlying revenue margins through its impact on the asset
mix.



Net fund inflows for the first three quarters amounted to $5.0 billion,
reflecting the strength of the firms' product offering to meet clients' needs
under a range of market conditions and the success of our strengthened sales
force and client retention initiatives.



Underlying this strength is our investment performance. For three and five year
periods, 85% and 91% of our institutional client mandates have outperformed
their benchmarks on an asset-weighted basis.  Performance relative to the peer
group has also been strong, with 85% and 88% of these mandates showing
performance above median over the same periods.  The investment performance of
our retail funds for the period to the end of October has shown improvement
after a weak start to the year, and remains strong for longer periods.



On 13 November 2003 PBA, one of the affiliates within OMAM(US), announced the
resignation of the two principals of the firm, Harold Baxter and Gary Pilgrim.
An internal review, triggered by the well publicised examination of mutual fund
firms' policies and practices by US government regulators, had identified
conduct that was not consistent with the highest standards of professional and
ethical behaviour. David Bullock, who joined PBA in July as president and chief
operating officer, has been named CEO and Scott Powers, CEO of OMAM(US), has
taken on the role of chairman.


UK



In October, we announced that we had reached agreement for the sale of Gerrard
for a consideration of £210 million, having completed a substantial
restructuring programme and having repositioned the business for the future.



Our UK businesses have also benefited from improved investment market conditions
since 30 June 2003.  At Gerrard, the hard work of recent years in rationalising
the expense base to deliver consistent profitability at lower market levels
resulted in positive operating earnings.  Trading volumes have also shown
improvement on the back of recovering investor sentiment. Despite the disposal,
this will positively impact the Group's full year operating result.


OMAM(UK) has continued to attract new client cash flows through its excellent
investment performance. Third party cash flows for the year to date total £250
million.  Investment performance for the retail unit trust funds relative to the
peer group has remained strong, with 71% of funds above median on an
asset-weighted, three-year basis.  All of its hedge funds have also shown
returns in excess of their benchmarks.  Selestia's innovative products have
attracted sales of £170 million in the first ten months of the year.


The project established to ensure that the Group complies with International
Accounting Standards from 2005 will result in a charge of £5 million, which will
be included in Group head office costs for the year.


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.


Preliminary results


Old Mutual plc expects to announce its preliminary results for the year ending
31 December 2003 on 23 February 2004.


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