South African financial services firm takes a hit

South African financial services firm Vunani reported a significant loss for its 2025 financial year, mainly due to increased insurance liabilities.

Vunani is an independent black-owned and -managed diversified financial services group with operations in South Africa, Zimbabwe, Botswana, Eswatini, Namibia, and Lesotho.

The group offers various financial services, including asset administration, fund management, insurance, investment banking, advisory services and institutional securities broking.

At the end of its 2025 financial year, Vunani had R10.9 billion in assets under administration and R46 billion in funds under management.

The company explained that its asset management division experienced notable stability in the year ended 28 February 2025, reversing the continuous decline in assets under management seen in prior years. 

“We transitioned from a period of asset losses in previous years to a more stable operating environment,” it explained. 

“Having stabilised, our focus will be on pursuing growth, although we are cognisant of the challenging environment given a lacklustre economy and high levels of unemployment.” 

“We therefore believe that business growth will require a certain degree of consolidation.”

Vunani reported that its revenue, including insurance revenue, increased to R692.9 million (2024: R665.2 million) for the year. 

However, Vunani’s other income, related to non-core income generated from the group’s various businesses, decreased to R6.9 million (2024: R19.4 million). 

Fortunately, this decline was offset by the interest received from Vunani’s investments, which increased significantly to R36.4 million (2024: R0.7 million) due to improved returns from its insurance-related investments.

Vunani’s total investment income for the year amounted to R9.8 million compared to R0.7 million in the prior year. 

The company explained that this increase is due to the improved performance of its underlying investments. 

However, the group also recorded negative fair value adjustments of R34.0 million (2024: positive R5.5 million) related to an increase in insurance liabilities.

As a result, the group made a loss of R3.1 million, compared to a profit of R24.2 million in 2024. Vunani reported a loss of 7.1 cents per share for its 2025 financial year.

The company also attributed its loss to the impact of lower assets under management for its South African asset management business, which resulted in lower revenue and decreased profitability. 

“There was also a decrease in advisory fees earned, which negatively affected profitability,” it explained. 

“Overall, all segments experienced a tough operating environment except the asset administration segment,” it said. 

However, the group remained positive that this would turn around in its 2026 financial year, as it expects all segments to contribute to its profitability.

“Management will be looking to work closely with the underlying businesses to help improve overall performance,” the company said.

Positively for shareholders, Vunani also declared a final dividend of 35.0 cents (2024: 9.0 cents) for the 2025 financial year. 

“This aligns with our goal of achieving attractive and long-term growth in operational profit while also paying a growing dividend to shareholders,” it said.