Sanlam (SLM) Q1 2026 earnings summary

Executive summary

• Achieved strong strategic and operational progress, including closing the Ninety One transaction, increasing stakes in Indian insurance businesses above 50%, and advancing banking services in South Africa.

• Maintained a strong capital position, with discretionary capital at the upper end of the target range, despite a reduction from R8.1 billion to R3.2 billion due to India acquisitions.

• Significant investments in organic growth, technology modernization, cloud migration, and AI integration to improve efficiency and reduce costs.

• First quarter earnings impacted by weather-related claims and investment variances, but underlying business and client activity remained resilient.

• Confident in meeting full-year guidance, with expectations for stronger second-half earnings.

Financial highlights

• New business volumes up 29% year-over-year to R38.6 billion; net client cash flows up 45% to R38.6 billion.

• Operating profit excluding investment variances declined by 7% in Q1 2026, but increased by 8% on a comparable basis.

• Adjusted headline earnings and investment returns on shareholder funds were lower due to higher bond yields, weak equity markets, and weather-related claims.

• Discretionary capital decreased due to acquisitions in India, but solvency and liquidity positions remain strong.

• Hedge loss from Indian rupee was ZAR 103 million in Q1.

Outlook and guidance

• Full-year 2026 earnings guidance is South African CPI plus 3%, excluding investment variances; through-the-cycle guidance remains at CPI plus 6%.

• Second-half earnings expected to exceed first-half, subject to weather and market conditions.

• Resilient cash generation and long-term organic growth expected, supported by diversified earnings streams and strong capitalisation.

• Persistency currently strong but inflation and economic conditions pose downside risks for the remainder of the year.

• Margin recovery expected as product mix evolves and India improves.