Coronation, a leading South African asset manager, has raised concerns over the continued pressure on the savings industry in South Africa, as the company reports a drop in annual profit for the year ending September 30, 2025.
Structural Headwinds in the South African Savings Market
According to Coronation, the local savings industry maintained its long-term contraction trend in 2025. Persistent consumer pressure and rising unemployment contributed to the decline. Additionally, the implementation of the Two-Pot Retirement System prompted many South Africans to access their retirement funds to meet immediate needs.
Despite these challenges, outflows from Coronation moderated to 5% of average assets under management year-on-year. The company remains heavily exposed to industry trends and does not anticipate rapid improvements in the short term.
Strong Performance Amid Economic Uncertainty
Coronation emphasized that its clients still benefited from consistent market outperformance across its fund range. The company reported total assets under management (AUM) of R761 billion, reflecting strong returns despite economic and political volatility.
Global uncertainties, such as the inauguration of a new US administration and potential trade tariffs, contributed to capital market volatility. Additionally, the rapid adoption of artificial intelligence is reshaping industries, increasing uncertainty in equity markets. Domestically, delays in the 2025 National Budget approval also heightened local market fluctuations. Coronation noted that the eventual approval in May could strengthen South Africa’s political framework going forward.
Financial Performance and Dividends
Coronation’s CEO, Anton Pillay, reported that fund management earnings per share (excluding SARS matters) increased 12% year-on-year to 452.2 cents per share. Revenue from fund management rose 10%, driven by an 11% increase in management fees and 3% growth in performance fees.
Total AUM grew 14% to R761 billion due to strong fund performance. However, the group’s profit declined by 24% to R1.6 billion, largely due to higher taxes. Basic and headline earnings per share dropped 25% to 474.3 cents per share.
The company declared a final gross dividend of 254 cents per share (2024: 228.0 cents), while gross total dividends per share decreased 20% to 454.0 cents per share from 566.0 cents previously.
This performance underscores the challenges and potential in investment opportunities in South Africa, highlighting the role of major asset management firms in South Africa in navigating a complex financial environment.
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This story was first reported by Bizcommunity.com. Read the full article here.
