With a pandemic reserve and R8 billion invested in zero-cost collars, Sanlam still to pay dividends.
On Monday, 30 March, Sanlam said in a trading update that it had a strong start to the year with business volumes rising almost a third in the first two months of the year, despite the Covid-10 crisis.
While many JSE-listed companies have decided to delay or cancel dividends to save money during the crisis, Sanlam has announced that it will pay a dividend of 334 per share on 20 April.
Even with business volumes rising 30 percent, the group warned that economic growth in all its markets will be lower than anticipated, with some, like South Africa, expected to enter recessions.
The volatility will have minimal effects on the company as its capital portfolio backing Sanlam Life’s R8 billion in requirements was invested in zero-cost collars, a strategy of capping both losses or gains through call and put options to ensure an asset is within a certain price range. The company also has a pandemic reserve of R760 million, which is available to cover increased mortality as a result of the outbreak.
Sanlam has also announced the appointment of a new FD and CEO.
Read more: Sanlam appoints Abigail Mukhuba as new FD