Poor performance in India won't deter expansion plans: Sanlam

South African insurance giant Sanlam has said it will not change its strategy to expand globally despite having a poor partnership performance with Indian financial services group Shriram.
Commenting on the company's half-year results, Sanlam CEO Ian Kirk said surplus capital would be employed in shoring up the companies in India, Malaysia and African countries.
He said Sanlam still had 4.6 billion rands in surplus capital of which 2.1 billion rands would be made available to its Emerging Markets division which handles the 50 companies in India, Malaysia and Africa where the company has an interest.
The half-year results showed that India had contributed 6 per cent of Sanlam's 97.3 billion rands group equity value on a normalised basis.

Sanlam has been aggressively seeking huge acquisitions across the globe for several years, but is now changing its strategy to expansion from acquisition.
The company began its foray into India in 2005 with a 26 per cent stake in Shriram Life Insurance Company (SLIC).

In 2011, Sanlam spent a further 1.9 billion rands on Shriram; including 944 million to buy back its shares in the company.
At the time the company said that the Indian investment was critical to Sanlam's strategy to expand its presence in India where insurance penetration was still low.
But performance in India has not been up to expectation since then due to abnormal levels of bad debt at Shriram.

This had contributed largely to lower earnings at Sanlam, despite the Indian operations showing growth of 10 per cent in the past year.
The Indian bad debts were attributed to Shiram's clients borrowing funds in the hope that the new government would accelerate infrastructure projects, but many of these expected projects had been deferred.
This forced the clients to renege on payments due.
Sanlam remained confident of its Indian business though, citing a similar situation in South Africa, with its own aggressive infrastructure growth programme which had initially been delayed but then got under way.