ASSET MANAGEMENT
SA unit trust industry ‘has become a battle over market share’
With the domestic savings pool showing only modest growth, South African asset managers are mostly competing to take assets off each other, according to a Citywire analysis based on Morningstar’s data on fund inflows and outflows in 2022.
Citywire said the flows “tell a story of a handful of big winners, who are successfully eating somebody else’s lunch, and a small group of losers struggling to hang onto their assets under management”.
It said income funds recorded the biggest net inflows and outflows.
Coronation prepares for tax bill of R800m to R900m
The Supreme Court of Appeal’s recent judgment in favour of the South African Revenue Service could result in Coronation Fund Managers facing a tax liability of between R800 million and R900m, the asset manager said in a statement last week.
Coronation said the provision was based on the financial years from 2012 to 2022 being impacted by the application of the SCA’s judgment.
The boards of Coronation Investment Management South Africa and Coronation Fund Managers have, on the advice of legal counsel and professional tax advisers, decided to apply to the Constitutional Court for leave to appeal. Nevertheless, the company is required to raise a provision, Coronation said.
The company expected the provision to hurt its critical financial measures for the half-year to the end of March 2023, and it will not be paying an interim dividend.
BANKING
Standard Bank fires 82 staff for illegitimately activating digital accounts
Standard Bank has dismissed 82 employees, more than half of whom are from the Western Cape, for their role in the illegitimate activation of digital bank accounts held in the name of clients without their consent, Business Day reports. A further eight employees are awaiting the conclusion of disciplinary processes after a more than year-long investigation into the scandal, which first came to the bank’s attention in the final quarter of 2021 after a staff member blew the whistle on the issue.
Standard Bank initially thought up to 20 000 client accounts may have been activated illegitimately. However, subsequent investigations found that less than 3 000 illegitimate accounts had been opened, less than 0.1% of the bank’s two million MyMo account base.
The bank said in May 2022 that it had initially charged 67 staff with gross misconduct and dishonesty for using their own funds to activate the MyMo accounts of existing Standard Bank customers without their knowledge, to meet new business targets. However, the total number of employees implicated soon grew as the bank realised the issue went beyond the Western Cape, where it originated.
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INSURANCE
Doctor arrested for alleged R6.5m insurance fraud
The Hawks have arrested a KwaZulu-Natal doctor who is allegedly linked to fraudulent life insurance claims amounting to millions of rands, IOL reports. The 84-year-old doctor had yet to appear in court.
The doctor is among four people who allegedly committed fraud to the value of R6.5 million in May 2020. The doctor certified that a person was dead, and Home Affairs issued a death certificate. The suspects claimed that the deceased had been cremated, but an investigation by the life insurer found that the person was alive.
GENERAL
Discovery reports double-digit interim operating profit
Discovery’s normalised operating profit rose 22% to R5.93 billion, while normalised headline earnings increased 30% to R3.7bn, in the six months to the end of December 2021. However, its net profit attributable to shareholders dipped 11% to R2.94bn from R3.3bn previously, Business Day reports.
The group once again withheld dividends, opting to invest in growth instead. Chief executive Adrian Gore said the company would revisit the payment of dividends at year-end.
Each of Discovery’s major regional business divisions delivered solid performances, with South Africa’s normalised operating profit up 23% to R4.414bn, underpinned by good results from Discovery Life and Discovery Invest.
Discovery Health saw a modest rise in its normalised operating profit, while Discovery Bank reported a R398m loss as the group continues to invest in building up the digital bank. Discovery Bank’s operating loss for the period was a 20% improvement on the previous half-year, thanks to the strong growth in primary clients: 581 500 compared with 385 200 at the end of 2021.
