Wrap Text
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE
Sanlam Limited
Incorporated in the Republic of South Africa Sanlam Life Insurance Limited
(Registration number 1959/001562/06) (Incorporated in the Republic of South Africa)
(“Sanlam”, “Sanlam Group” or “the group”) (Registration No. 1998/021121/06)
JSE Share code: SLM Bond Issuer Code: BISLI
A2X share code: SLM LEI: 378900E10332DF012A23
NSX share code: SLA (“Sanlam Life”)
ISIN: ZAE000070660
Unaudited interim results for the six months ended 30 June
Key performance indicators
Comparable
Unit 2026 2025 % change
% change
Earnings
Management information
Core earnings1 R million 7 377 7 664 (4) 1
Adjusted headline earnings2 R million 7 741 9 797 (21) (22)
Operating profit R million 7 289 7 864 (7) (2)
Operating profit, excluding investment variances R million 6 777 7 202 (6) (1)
Headline earnings R million 8 274 9 705 (15) (16)
Weighted average number of shares million 2 117 2 116
Adjusted weighted average number of shares million 2 117 2 116
Core earnings per share cents 348 362 (4) 1
Headline earnings per share cents 396 465 (15) (16)
Diluted headline earnings per share cents 391 459 (15) (16)
International Financial Reporting Standards (IFRS)
information
Basic profit attributable to shareholders’ R million 13 200 10 227 29
Basic profit attributable to shareholders’ per share cents 632 490 29
Diluted basic profit attributable to shareholders’ per share cents 624 483 29
Business volumes
Total new business volumes R billion 223,6 216,3 3 22
Total net client cash flows R billion 77,6 47,4 64 42
Life insurance
New business volumes (PVNBP)3 R billion 58,1 51,2 13 14
Value of new covered business R million 1 049 1 139 (8) (7)
New covered business margin % 1,80 2,22 (42bps) (41bps)
Life insurance net client cash flows R billion 19,3 15,6 24 24
General insurance
New business volumes R billion 26,4 25,6 3 7
Net client cash flows R billion 10,7 10,8 (1) 3
Investment management
New business volumes R billion 155,5 153,1 2 29
Net client cash flows R billion 47,5 21,0 >100 71
Group equity value
Group equity value R million 177 709 185 559
Group equity value per share cents 8 401 8 773
Return on group equity value per share4 % 3,7 8,9
Adjusted return on group equity value per share4 % 15,5 7,6
Return on equity
Annualised return on equity4 % 15,9 20,5
Annualised adjusted return on equity4 % 18,4 18,3
Economic solvency cover
Sanlam Group % 177 183
1 The group uses core earnings as its measure of underlying sustainable cash earnings and as a primary input into dividend and capital
management decisions. Core earnings is derived from IFRS-aligned operating profit by excluding the effect of short-term investment
market volatility on insurance contracts (investment variances) and the impact of future-fit project expenses incurred as well as including
the release of the asset mismatch reserve. Further detail on the group’s earnings framework, including definitions and rationale, is available
online in the Sanlam’s earnings framework document released today.
2
Operating profit including investment return.
3
Present value of new business premiums.
4
The annualised number is the half-year number compounded, excluding one-off items not expected to repeat.
Note: Unless otherwise stated, all commentary relates to the six months ended 30 June 2026 compared to the six
months ended 30 June 2025. Growth rates are normalised and provided on a comparable (constant currency and
consistent group structure) basis. Absolute amounts are presented on an actual basis.
Overview
The group’s operating performance in the first half of 2026 was characterised by strong underlying organic
growth. However, earnings were negatively impacted by elevated weather-related general insurance claims
across South Africa and parts of Africa, as well as rand strength, which reduced the translated value of earnings
from businesses outside South Africa. On the other hand, long-term value creation was very good during the
period and resulted in an adjusted return on group equity value above the long-term hurdle.
The group has focused on cash generation and efficiency across all businesses within the group. As a result
of this focus on cash, the short-term earnings volatility is not expected to negatively impact the group’s dividend
capacity during 2026 despite the headwinds from weather-related claims and a strong rand. Consumers were
under pressure in the first half of 2026 as a result of the US-Iran conflict with its impacts on energy prices and
interest rates.
Despite the various external impacts and significant investment into future growth initiatives, Sanlam reported
a 1% first-half growth in comparable core earnings. Pleasingly, the underlying growth of the group’s operating
businesses was strong: new business volumes increased by 22% to R224 billion and net client cash flows
increased by 42% to R78 billion, reflecting the strong customer focus and competitiveness of the group’s
operating businesses.
The group's earnings framework
The group introduced operating profit as an earnings measure at the 2025 capital markets day, providing
investors with an IFRS-aligned measure of earnings performance that enhances comparability with industry
peers. Operating profit reflects the performance of the group’s businesses under the accounting framework
and includes investment variances and project expenditure incurred in the period, even where this is already
funded by reserves. As noted at the time, this can increase short-term volatility, due to mark-to-market gains
and losses from one period to the next.
Core earnings is Sanlam’s measure of underlying sustainable operational earnings and is used as the primary
input to dividend decisions. It is derived from operating profit and adjusted for items that can create short-term
earnings volatility. These adjustments to operating profit remove the effect of short-term investment market
volatility on insurance contracts and the impact of Future Fit project expenses incurred, while including the
release of the asset mismatch reserve.
Both operating profit and core earnings will continue to be disclosed, providing investors with complementary
perspectives on the group’s earnings performance. Further detail on the group’s earnings framework, including
definitions and rationale, is available online in the Sanlam’s earnings framework document released today.
The targets for operating profit and core earnings are aligned because target-setting assumes delivery of
expected investment returns. In any reporting period, however, actual operating profit may differ from core
earnings as market returns vary from these assumptions, giving rise to investment variances that are smoothed
out over time in core earnings.
Current-year performance
Operating profit declined by 2% on a comparable basis, reflecting lower positive investment variances and
higher project expenditure than in the prior period. Excluding investment variances, the operating profit was
1% lower than the prior period.
Adjusted headline earnings declined by 22%, mainly due to lower shareholder investment returns relative to
the prior period, reflecting weaker market conditions. The impact of weaker equity markets and higher interest
rates on bond valuations, particularly in Morocco and India respectively, following strong gains in the previous
period, weighed on performance. Investment returns were further impacted by adverse unrealised mark-to-
market movements on the group’s investment in Ninety One subsequent to the closing of this transaction in
February 2026.
IFRS attributable earnings to shareholders increased by 29% on a reported basis. This was mainly due to
gains from corporate activity, including the profit on the disposal of the Sanlam Investments single active asset
manager business, and the deemed disposal gain from the dilution of Sanlam’s interest in Shriram Finance
Limited (SFL) following Mitsubishi UFJ Financial Group’s (MUFG) capital injection.
Going forward, the group will focus its earnings analysis on core earnings as it provides the best indication of
the group’s underlying earnings performance and cash generating capacity.
The table below reconciles operating profit to core earnings.
For the six months ended 30 June
2026 2025 Change % Change %
(R million) (Comparable)
Operating profit 7 289 7 864 (7) (2)
Investment variances (512) (662) 23 20
Release of asset mismatch reserves (AMR) 221 263 (16) (16)
Movement in Future fit project expense reserves 379 199 90 90
Core earnings 7 377 7 664 (4) 1
Reported core earnings were adjusted up by 5% for comparability, reflecting the impact of a stronger rand
(3,5%) and changes to the group structure over the period. On a comparable basis, core earnings increased
by 1% to R7,4 billion. Life and health core earnings grew by 9%, investment management by 48%, and credit
and structuring by 6%. This strong result was largely offset by a pronounced decline in general insurance
earnings as a result of unusually large weather-related claims during the period and weaker general insurance
underwriting outcomes in South Africa and Pan-Africa.
Core earnings growth benefited from an estimated 5% uplift arising from the refinement of the asset-liability
management (ALM) approach and hedging strategy for the IFRS 17 risk adjustment for non-financial risk
(RANFR). This was more than offset by a 3% impact on the explicit investment in organic growth over the
period, and a further 8% impact from elevated weather-related claims and weaker underwriting experience in
parts of the African general insurance portfolio. This reduced sustainable core earnings growth from around
7% to 1%.
On a line of business basis, life and health earnings reflected ongoing growth in underlying books, supported
by favourable mortality experience, higher asset-based fee income and cost efficiencies in South Africa and
Pan-Africa. Offsetting this growth there were operating declines at both Afrocentric and in the Malaysian life
business. The Malaysian life business made losses in the period following elevated health insurance claims
and regulatory restrictions on premium increases on health insurance products.
Life and health earnings benefited from the group’s review of the ALM approach and hedging strategy for the
IFRS 17 RANFR for Sanlam Life and Savings’ life insurance businesses. The review considered updated
actuarial analysis, observed experience and the compensation required for bearing non-financial risks. As a
result, a portion of margin was reallocated from the more interest-rate-sensitive RANFR to the less interest-
rate-sensitive contractual service margin (CSM), reducing the overall interest-rate sensitivity of IFRS 17
margins. The group also refined the ALM strategy for assets backing the RANFR, shifting from floating-rate to
fixed-rate exposure. Together, these changes reduced interest-rate exposure by 61% at 30 June 2026 and will
make investment variances in operating profit less sensitive to interest-rate movements in future. The transition
of the ALM strategy is underway and has resulted in a once-off positive impact to earnings in the first half of
2026.
Investment management benefited from elevated assets under management, driving strong asset-based fee
income in South Africa and Pan-Africa. This was reinforced by disciplined management of stranded costs after
the Ninety One transaction. Credit and structuring delivered a strong performance, driven by continued loan
book growth and improved net interest margins in India, partly offset by increased technology development
costs to enable the digital ecosystem and muted credit loan book growth in South Africa.
General insurance was the largest offset to an otherwise positive performance. Earnings were affected by
weather-related catastrophe claims and large loss events in South Africa and Pan-Africa, weaker underwriting
results in Pan-Africa, as well as weaker investment market performance in India and Pan-Africa, which
weighed on general insurance investment returns.
Business volumes and client flows
New business volumes increased by 3% to R224 billion. On a comparable basis, group new business volumes
increased by 22%, supported by strong inflows across the portfolio. Life insurance new business grew by 14%
on a present value of new business premium basis, with strong performance across South Africa, Pan-Africa
and India. General insurance delivered growth of 7%, supported by positive contributions across most regions.
Investment management volume grew by 29%, underpinned by healthy asset management and retail platform
flows in South Africa.
In India, SFL continued its strong growth trajectory, expanding its credit book by 15%, further reinforcing the
quality and resilience of the group’s earnings and growth profile.
Net client cash flows increased by 42% to R78 billion reflecting the strong customer focus and
competitiveness of the group’s operating businesses.
Value of new business
The value of new business (VNB) written amounted to R1 billion for the period, contributing to the return on
group equity value. VNB declined by 7% despite strong life sales growth, reflecting an ongoing shift in product
mix in South Africa towards market-linked annuities and away from higher-margin life annuities. Market-linked
annuities remain strategically attractive because they are capital light and generate attractive returns. The VNB
margin was 1,8%, improving slightly from the first quarter of 2026, but remaining below the comparative period.
Underlying client activity remained healthy, independent of the VNB movement. It reflects a shift toward capital-
light, market-linked and investment-contract solutions, where value is not fully captured in IFRS 17 VNB at
point of sale. These flows are important because they retain client assets within the Sanlam ecosystem,
strengthen net client cash flows and support future asset-based fee income. The group is encouraged by the
retention and growth of IFRS 9 related volumes, even as the shift in mix reduced reported VNB and VNB
margin in the period.
Shareholder value creation and returns
Annualised adjusted return on equity (RoE) was 18,4% for the six months ended 30 June 2026, above the
five-year average performance of 17,2%.
Group equity value (GEV) per share was R178 billion at 30 June 2026. The group delivered an adjusted
RoGEV per share of 7,7% for the half-year (15,5% annualised), well ahead of our 6,1% hurdle rate (12,5%
annualised). This was driven by strong contributions from new business, favourable operational results and
change of valuation assumptions for the SFL stake. Following the loss of a major contract by Afrocentric, and
the resulting financial pressure on it, the group wrote-off the value of its investment in Afrocentric, negatively
impacting the RoGEV. The actual RoGEV per share was 1,4% (3,7% annualised) as a result of reductions in
the share prices of both Santam and Ninety One, strengthening of the rand against the Indian rupee and
Moroccan dirham, and an increase in risk-free interest rates.
Capital strength
Sanlam remained well capitalised at 30 June 2026. The group’s economic solvency cover and discretionary
capital remained comfortably within the target range, supporting financial flexibility, dividend funding capacity
and continued investment in strategic growth opportunities.
The group's discretionary capital stood at R2,3 billion at 30 June 2026, within the target range of R1 billion to
R3 billion, compared with R8,1 billion at 31 December 2025. As previously communicated, the group ring-
fenced some R5 billion to increase our interests in the Shriram life and general insurance businesses. With
these transactions now complete, discretionary capital is now within the target range.
The group has improved its working capital management and cash usage during the course of 2026 and
expects to see improved cash conversion over 2026 to underpin the group’s dividend.
Outlook
Sanlam enters the second half of 2026 supported by sustained client activity, solid cash generation and
positive underlying momentum in each of the underlying businesses. The group’s diversified earnings streams,
strong balance sheet and robust solvency and liquidity position provide resilience and a firm foundation for
continued execution of the group’s strategy for quality growth.
The group continues to see attractive long-term growth opportunities across its core markets. As guided at the
2025 annual results, full-year earnings growth in 2026 is expected to be below the group’s medium-term target,
reflecting:
• deliberate investment in future growth platforms;
• initial start-up accounting losses in Santam Syndicate 1918;
• weaker shareholder investment returns, and
• weather-related claims.
Underlying business momentum and growth remains strong and the group expects to meet its full-year 2026
guidance, supported by continued execution, disciplined investment spend and an assumed normalisation of
weather-related and large loss claims in the second half. This is expected to be partly offset by earnings
headwinds in the South African health operations following the loss of a major client, and elevated health
insurance claims in Malaysia.
Improved working capital and cash conversion are expected to support dividend capacity and offset the impact
of weaker earnings, leaving the group's dividend outlook unchanged and in line with medium-term target.
Despite the positive outlook for the operating environment and the business, management remains mindful of
external uncertainties, including macro-economic conditions, market risk, adverse weather and other factors
beyond the group’s control.
This short-form results announcement is the responsibility of the Sanlam board of directors and is a summary
of the information contained in the full announcement which can be found at:
https://senspdf.jse.co.za/documents/2026/JSE/ISSE/SLM/HY26.pdf and further commentary can be found
available on the Sanlam website.
The condensed consolidated interim financial statements for the six months ended 30 June 2026, including
comparatives for the six months ended 30 June 2025 where applicable, have not been audited or reviewed by
the company’s external auditors.
The full condensed consolidated interim financial statements may be requested from the Company Secretary
at Sanlam’s registered office, the office of its sponsor during office hours and available at
https://www.sanlam.com/downloads/results-announcements/2026/Sanlam-Interim-Results-2026-spreads.pdf
or via the investor relations section of www.sanlam.com, Sanlam’s website at no charge. Any investment
decision should be based on a consideration of the full reviewed interim results.
SANLAM LIMITED
Registered office: 2 Strand Road, Bellville, 7530, South Africa
Sanlam Investor Relations
E-mail: ir@sanlam.co.za
JSE SPONSOR
Equity Sponsor to Sanlam
The Standard Bank of South Africa Limited
Debt Sponsor to Sanlam Life Insurance Limited
The Standard Bank of South Africa Limited
NSX sponsor
Simonis Storm Securities (Pty) Ltd
10 September 2026
Date: 10/09/2026 09:00:00
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