Interim Results - Part 1

OLD MUTUAL PLC
7 September 1999

PART 1

       Interim Results for the six months ended 30 June 1999

                       FINANCIAL HIGHLIGHTS
                                 
                                 
*    Strong increase of 34% in embedded value to £4.7 billion
     (R44.6 billion)

*    Embedded value per share is £1.58 (R15.01), before the effects
     of additional capital raised in July 1999.  Adjusted for the
     new capital, embedded value per share is £1.52 (R14.50)

*    Embedded value profits of £1,202 million (R10,472 million) in
     the half year included a positive contribution from new
     business of £13 million (R132 million)

*    Operating profit before tax using a long term investment
     return was £280 million(R2,760 million)

*    Total funds under management now exceed £40 billion (R380 billion)

*    Profit after tax for the period was £722 million (R7,103
     million)

*    Basic  earnings per share (EPS): 20p (199c); EPS on a smoothed
     basis: 6p (60c)

'After  the success of our listing, we are continuing to  focus  on
the  maximisation of shareholder value by growing revenue, reducing
costs and improving our utilisation of capital.
The  improved economic outlook in South Africa, together  with  the
benefits from our cost-cutting and marketing initiatives and growth
of  our  banking and asset management activities, means we look  to
the future with confidence.'

                            MIKE LEVETT, Chairman & Chief Executive
                                                                   
                                                                   

ENQUIRIES:

Old Mutual plc                          Tel: + 44 (0) 171 569 0100
Mike Levett, Chairman
Eric Anstee, Finance Director
James Poole, Director of Investor Relations
Heather Formby, Investor Relations

College Hill                            Tel: + 44 (0) 171 457 2020
Alex Sandberg
Gareth David

College Hill South Africa
Tony Friend                             Tel: + 27 (0) 11 447 3030
Graham Fiford

     
                          OLD MUTUAL PLC
       Interim Results for the six months ended 30 June 1999
                                 
                       CHAIRMAN'S STATEMENT
The first half year of 1999 has been one of enormous change for Old
Mutual plc.  In May we completed our demutualisation and on 12 July
1999  we successfully listed on the London, Johannesburg, and other
southern  African stock exchanges.  It gives me great  pleasure  to
present the progress in our business during the six months ended 30
June  1999.   These interim results reflect strong performances  by
the core life assurance, banking, and asset management businesses.

During  the  period the Group achieved a strong uplift in  embedded
value, which rose 34% to  £4.7 billion (R44.6 billion).  This large
increase  included  the  benefit of very high  investment  returns,
which produced a gain of £477 million (R4,688 million) in excess of
the  smoothed  return used to calculate profits  in  our  insurance
businesses.  Whilst this more than recovered the deficit  from  the
previous  year  to December 1998, it is considered unlikely  to  be
repeated in the second half.  It is pleasing to note that there was
a   positive  contribution  to  embedded  value  profits  from  new
business. There was also a significant increase in the value of in-
force  business  generated from the strong  investment  returns  in
South Africa.

The  impressive results reported by our banking subsidiary, Nedcor,
were  in  line with our expectations, taking into account that  its
profits have historically been weighted towards the second half  of
the  year.  Nedcor generated a profit of £20 million (R193 million)
from  the  sale  of its travel business NedTravel and  strengthened
risk  provisions.  Our  general  insurance  subsidiary,  Mutual   &
Federal, recorded strong investment returns but suffered from  high
claim frequency and cost.
Overall  Group operating profits in Sterling were affected  by  the
change  in the average Rand to Sterling exchange rate from 9.1  for
the  year to December 1998 to 9.8 for the six months to June  1999.
In  order  to  present currency effects more clearly,  the  interim
results are reported in both Rand and Sterling.

The  market  for  financial  services  in  South  Africa  is  still
recovering   from   the  effects  of  last   year's   downturn   in
stockmarkets.   The  rise  in interest  rates,  which  resulted  in
increasing  levels  of  debt repayments  for  consumers,  adversely
affected  life  assurance  new recurring  business  volumes,  which
amounted  to  £109 million (R1,075 million). A number of  marketing
and  product development initiatives are in place ensuring that our
South  African life assurance business is in a strong  position  to
take  advantage of the improved confidence levels now returning  to
the market.
Cost  reduction  through Project 500 is on  track.  Key  areas  for
rationalisation  have been identified at business unit  level,  and
action plans are being implemented that are planned to deliver,  by
the  end  of  the  current  year, the budgeted  £50  million  (R500
million)  annual cost savings for next year.  I am  confident  that
this challenge will be achieved.
      
                 
Life assurance

In  addition  to  the uplift in embedded value  in  the  first  six
months, the Group's Life Assurance operations produced an excellent
overall performance.

Operating  profit  before taxation, calculated using  a  long  term
smoothed  rate of return of 14%, was £144 million (R1,418  million)
for  the period.  This was achieved after charging a further  £52.5
million  (R516  million) of provisions for pensions mis-selling  in
our  UK business, and represents a strong recovery from the effects
of the downturn in markets in the previous year.

Individual  Life's  single  premium business  is  rising  strongly,
driven  by  the demand for our Investment Frontiers product  range.
This  suite of products, launched in September 1998 in response  to
customer  requirements  for  greater  investment  flexibility   and
choice,  has already attracted funds of more than £400 million  (R4
billion). This further strengthens our presence at the upper end of
the investment market.
Recurring  premium  business  has  remained  under  pressure,  with
volumes  on  individual life business in South Africa running  well
below  plan.  Recent business levels have, however, shown  a  small
improvement  and, with the decline in interest rates that  has  now
taken place, we expect the recovery to continue.
Affinity   Group  business  continues  to  generate  a  significant
contribution to life assurance profitability.  Performance  in  the
period reflected the effects of growth in new business and a  tight
control of costs.
New  business  levels  in  Employee Benefits  have  been  adversely
affected  by  the uncertainty in South African investment  markets.
Two  major  pension products were launched successfully during  the
first  half. Genesis, designed for defined contribution funds  that
offer  investment choice to members, was launched  in  April  1999.
Platinum  Pensions,  which  provides a pension  for  life  and  the
opportunity  to participate in investment profits, was launched  in
March  1999.   Together, these products have already generated  new
single premium business of around £200 million (R2 billion).

Our   Employee  Benefits  administration  business  is   undergoing
fundamental restructuring to improve product profitability,  client
service, and back office administration.
      
We  are  continuing  negotiations for  the  sale  of  our  UK  life
operation which is closed to new business.  The business lacks  the
critical  mass to be a major competitor in the UK life  market.  If
negotiations  for  the sale cannot be concluded satisfactorily,  we
will restructure the business to run it off to realise the embedded
value.  We have made further provisions for pensions mis-selling of
£52.5 million (R516 million), reflecting the effects of changes  in
personal  pension  holder  redress  calculations,  issued  by   the
Financial Services Authority on 2 August 1999.
Asset management

For  the  first  time we are reporting profits separately  for  our
asset management businesses.  At £24 million (R234 million) for the
first  half  year,  these are on an upward trend.   The  businesses
continue  to produce outstanding investment performance.   This  is
the  key  to  continued  success in increasing  sales  and  winning
mandates.

The  UK  Growth Trust ranked 10th out of 224 funds in  its  sector.
Our  Worldwide Trust was a top quartile performer over  1,2  and  3
years.  The North American fund was ranked 2nd out of 85 funds over
3 years.

During  this period we increased our funds under management through
strong  sales  of  unit  trusts  and increased  institutional  fund
management business.

Funds   under  management  at  our  wholly-owned  asset  management
subsidiaries increased by 18.6% to £38 billion (R364 billion).

Management  aim to capitalise on the strengths of Old Mutual  Asset
Managers  (OMAM) in southern Africa and Europe, and  to  strengthen
its  position  as  a  one stop, multi-national  asset  manager  for
institutional clients. OMAM South Africa was awarded  £920  million
(R9,000  million)  of  new institutional fund mandates  during  the
period.
We  have  now  completed the integration of our UK  private  client
asset  management business, Capel Cure Sharp.  As part  of  Project
500,  annualised cost reductions of £13 million (R128 million) have
been  realised  at  the operating profit level, in  line  with  our
expectations. Funds under management at Capel Cure Sharp have grown
to £10 billion (R95 billion).
Albert E Sharp Securities, which provides institutional broking and
corporate  finance services in the UK, saw an increase in corporate
activity.  We have recruited additional key personnel to grow  this
business further.
      
Banking

Nedcor   Limited,  our  quoted  subsidiary,  once  again   achieved
excellent results.  The company reported:

*    a  rise  in  operating profit of 28%  to  £98  million  (R968
     million)

*    an earnings per share increase of  26% to 415c (45p)

*    an  improvement in the key cost to income ratio  by  more  than
     four percentage points to 54.1%

*    an  increase in return on equity to 20.6% (1998: 20.1%) on  an
     equity  base which grew 23% over the period to R9,862  million
     (£1,037 million)

This result has been achieved after strengthening the balance sheet
by   increasing  general  risk  provisions  by  R193  million  (£20
million).  Nedcor  achieved a profit on  the  sale  of  its  travel
business,  NedTravel, which is treated in our  results  as  a  non-
operating item outside of operating profits.
Average  total assets at Nedcor showed satisfactory growth of  18%.
Non-interest revenue represented 43% (1998: 46%) of total income.
We  continue  to  explore opportunities between our life  assurance
operations  and  Nedcor to generate additional profitable  business
for  the  Group and we have identified a number of new  initiatives
for  co-operation.  Peoples Bank and our Affinity  Group  operation
are  now  cross-selling products between their respective  customer
bases.  In  February 1999, the linked  products businesses  of  Old
Mutual  and  Nedcor  Investment Bank were  merged  to  form  Galaxy
Portfolio Services.  In May, Old Mutual acquired a 40% stake in NIB
Securities  from NIB Holdings, which retained 40% of  the  business
and sold the remaining 20% to Gensec Limited.

To  unlock  further value for shareholders, 15% of the  capital  of
Nedcor  Investment  Bank  was  listed  on  the  Johannesburg  Stock
Exchange  in August 1999.  Old Mutual, by underwriting  the  offer,
secured a 5% holding in NIB Holdings. 
                                 
General insurance

Mutual  &  Federal  Insurance  Company  Ltd.,  our  quoted  general
insurer,  produced  a strong investment performance.  There  was  a
decline in underwriting results which was in line with the rest  of
the  South African general insurance market arising from increasing
claims  and  higher costs per claim. There was good performance  in
containing  operating costs. Mutual & Federal continues  to  review
rates  and is in a good position to benefit from any upturn in  the
underwriting cycle.

Dividend

As  reported  in  our  Prospectus, the first dividend  to  be  paid
following  our listing will be a final dividend in respect  of  the
financial year ending 31 December 1999, which we expect to  pay  in
May  2000.  Accordingly, no interim dividend has been declared  for
the six months ended 30 June 1999.

Year 2000

A programme to ensure Year 2000 compliance in Old Mutual's business
units, and in key third party systems, was initiated in July  1996.
Our  Year 2000 programme is on track. We are satisfied that we have
taken  appropriate steps to limit disruption to our  businesses  by
identifying  key  external  risks to the  organisation  and  making
contingency  plans  where  necessary.   Testing  of  our   business
processes and our contingency plans will cost the Group £3  million
(R32  million) for the whole of this year, and is scheduled  to  be
completed by October 1999.

Outlook

After the success of our listing, we are confident of achieving our
goals for the remainder of 1999. Our immediate focus is to maximise
shareholder  value from existing businesses. An improving  economic
outlook  in  southern  Africa, together with  the  success  of  new
marketing, cross-selling, and cost-cutting initiatives,  provide  a
solid  foundation  for Old Mutual to grow returns  to  shareholders
while at the same time enhancing our service to customers.
The  value  of our capital on the stockmarket following listing  of
our  shares  at £1.20 (R11.25) on 12 July, was £4.1 billion  (R39.3
billion),  including the 179 million additional  shares  bought  by
institutional  investors as part of the after-market  stabilisation
procedure.  In  total  this listing provided £559  million  (R5,355
million)  of  net  new capital to the Company.  As  stated  in  our
Prospectus,  we  have  used some of the  new  capital  to  pay  off
existing  loans.  We subsequently negotiated a new three year  £300
million  syndicated  revolving credit facility with  major  banking
institutions in the London market, at favourable rates.
                                 
Old Mutual now has the financial resources to expand its activities
in  line with the strategy we set out in the Prospectus. Our  plans
for  development  are  subject to tough  hurdle  rates  of  return,
against  which we judge the viability of any potential acquisitions
or new business ventures.

The  past six months have been one of the most eventful periods  in
the long history of Old Mutual.  It is a great tribute to our staff
around  the world that we have been able to accomplish so  much  to
position the Group for the new millennium.

                              MIKE LEVETT Chairman & Chief Executive
                
                                 
               Consolidated profit and loss account
               for the six months ended 30 June 1999
                                 
             Pro                                                       Pro
           forma                                                     forma    
6 Months Year to                                          6 Months  Year to
  to 30       31                                             to 30       31
   June  December                                             June December
   1999     1998                                              1999     1998
     Rm       Rm                                     Note        £m      £m
                                                      
                                                                      
                  Operating profit                                    
  1,418    1,553  Life assurance (based on a long     4,       144     171
                  term investment return)             13

    968    2,556  Banking                             5         98     281
    234      207  Asset management                              24      23
    265      782  General insurance business (based                       
                  on a long term investment return)   6         27      86
  (125)    (248)  Other shareholders'                 7       (13)    (27)
                  income/expenses
                  Operating profit before short term                      
  2,760    4,850  fluctuations                                 280     534
                  in investment return
  4,688  (4,329)  Short term fluctuations in          13       477   (477)
                  investment return
    154        -  Non-operating items                 9         16       -
  7,602      521  Profit on ordinary activities                773      57
                  before tax
  (499)    (773)  Tax on profit on ordinary           10      (51)    (85)
                  activities
  7,103    (252)  Profit/(loss) on ordinary                    722    (28)
                  activities after tax
(1,187)    (668)  Minority interests                         (121)    (73)
  5,916    (920)  Retained profit/(loss) for the               601   (101)
                  financial period
                                                                          
    R        R                                                 £       £
 1.99     (0.31)  Basic earnings per share            11      0.20  (0.03)
 1.97     (0.31)  Diluted earnings per share          11      0.20  (0.03)
 0.60      0.92   Earnings per share based on a long  11      0.06   0.10 
                  term investment return                           
                                 
All of the above amounts are in respect of continuing operations.

                                 
                    Consolidated balance sheet
                        As at 30 June 1999

 As at    As at                                        As at    As at
    30       31                                           30       31
 June  December                                         June  December
                                                                
  1999     1998                                         1999     1998
    Rm       Rm                                           £m       £m
                                                                     
                INSURANCE ASSETS                             
   931      981 Intangible assets                         98      100
157,848  129,851 Investments                          16,602   13,283
158,779  130,832                                      16,700   13,383
                Assets held to cover linked                          
54,872   50,067 liabilities                            5,771    5,121
                Reinsurers' share of technical                       
 1,736    1,917 provisions                               183      196
 3,564    2,055 Debtors                                  375      210
 3,589      872 Other assets                             377       89
 3,092    1,716 Cash at bank and in hand                 325      176
 2,560    3,272 Prepayments and accrued income           269      335
228,192 190,731 Total insurance assets                24,000   19,510
                                                         
                                                                     
                BANKING ASSETS                                       
                Cash and balances at central             
 2,963    5,250 banks                                    312      537
                Treasury bills and other               
12,717    7,154 eligible bills                         1,338      732
   598    1,338 Loans and advances to banks               63      137
96,386   92,043 Loans and advances to                 10,138    9,415
                customers                                  
 6,087    4,023 Debt securities                          640      412
 1,470    1,280 Equity securities                        155      131
 2,678    3,343 Other assets                             283      343
 2,452    2,467 Prepayments and accrued income           258      252
125,351 116,898 Total banking assets                  13,187   11,959
                                                        
353,543 307,629 TOTAL ASSETS                          37,187   31,469

                                 
                    Consolidated balance sheet
                        As at 30 June 1999
                                 
 As at    As at                                     As at     As at
    30       31                                        30        31
  June  December                                     June  December
  1999     1998                                      1999      1998
    Rm       Rm                              Note      £m        £m
                                                           
                CAPITAL AND RESERVES                       
 2,964          Called up share capital               297  
 3,563          Share premium account                 357  
19,278          Profit and loss account             2,062  
     -   15,527 Fund for future               12        -     1,588
                appropriations
25,805   15,527 Total equity shareholders'    12    2,716     1,588
                funds
                                                                   
                                                                   
 7,883    7,901 Minority interests                    829       808
                                                                   
                                                                   
    57       57 Fund for future                         6         6
                appropriations
                                                                   
                                                                   
                INSURANCE LIABILITIES                              
137,607 117,492 Technical provisions               14,474    12,018
54,138   50,062 Technical provisions for            5,694     5,121
                linked liabilities
 2,101    4,134 Provisions for other risks            221       423
                and charges
 8,698    3,632 Creditors                             915       372
 1,144      428 Accruals and deferred                 120        44
                income
203,688  175,748 Total insurance liabilities       21,424    17,978
                                                                   
                BANKING LIABILITIES                                
 6,191   11,954 Deposits by banks                     651     1,223
89,422   81,580 Customer accounts                   9,405     8,345
14,190    8,764 Debt securities in issue            1,493       896
   546      700 Provision for liabilities              57        72
                and charges
 5,189    4,815 Other liabilities                     546       493
   572      583 Subordinated liabilities               60        60
116,110  108,396 Total banking liabilities         12,212    11,089
353,543  307,629 TOTAL LIABILITIES                 37,187    31,469

                  Consolidated statement of total
                    recognised gains and losses
               for the six months ended 30 June 1999
                                 
                                                               
      6                                                6 months
 months
  to 30                                                   to 30
   June                                                    June
   1999                                                    1999
     Rm                                                      £m
                                                       
  5,916      Retained profit for the financial period       601
    408      Foreign exchange movements                     123
  6,324      Total recognised gains and losses              724
             for the period



                   Reconciliation of movement in
                     equity shareholders' funds
               for the six months ended 30 June 1999
                                 
                                                               
      6                                                6 months
 months
  to 30                                                   to 30
   June                                                    June
   1999                                                    1999
     Rm                                           Note       £m
                                                   
                                                       
 15,527      Equity shareholders' funds at the            1,588
             beginning of the period
  6,324      Total recognised gains and losses              724
             for the period
  3,954      Issue of new share capital on self-  12        404
             investment transaction
 25,805      Equity shareholders' funds at the            2,716
             end of the period
                                 
                       
                 Consolidated cash flow statement
               for the six months ended 30 June 1999
                                                                              
                                            
6 months                                                     6 months
  to 30                                                         to 30
   June                                                          June
   1999                                                          1999
     Rm                                                Note        £m
                                                            
  1,651      Net cash inflow from insurance operating             168
             activities
(1,693)      Net cash outflow from banking operating            (172)
             activities
   (42)      Net cash outflow from operating           15         (4)
             activities
  (360)      Taxation                                            (37)
  (313)      Capital expenditure and financial                   (32)
             investment
    154      Net disposal of group undertakings and                16
             businesses
  (561)      Net cash outflow before financing                   (57)
             activities
    570      Net cash inflow from financing                        58
             activities
      9      Net cash inflow of the group excluding                 1
             long-term business
                                                                     
                                                                     
             Cash flows relating to insurance                        
             activities were invested as follows:
    428       Increase in cash holdings                            44
  1,687       Net portfolio investments                           171
  2,115                                                           215
             Cash flows relating to banking                          
             activities were invested as follows:
               Decrease in cash and balances at                 
 (2,106)       central banks                                     (214)
            Net cash inflow of the group excluding                 
    9       long term business                                     1
                                 
  
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