Old Mutual is expected to next week leave the door open to a break-up, although it will stop short of announcing a radical restructuring when it reveals the results of a strategic review.

The conclusion of the review, led by Julian Roberts, new chief executive, will disappoint some investors who had been hoping for more far-reaching action, such as a separation of the group’s South African and international businesses.

The options open to the London-listed South African financial services group are expected to have been limited by current market conditions, according to people familiar with the situation.

Consequently, less far-reaching actions, such as smaller disposals or tidying up of the group’s sprawling portfolio could be more likely.

Old Mutual’s stake in Nedbank is not expected to be a core part of the group going forward, although finding a buyer could be difficult at the moment. Old Mutual declined to comment.

Shares in Old Mutual fell 12 per cent to 41½p on Friday, weighed down by concerns that the group may be forced to cut its dividend or raise capital to meet costs in its troubled US life business.

Roman Cizdyn, analyst at Blue Oar Securities, said he expected Old Mutual to cut its dividend when the group announces its results on Wednesday.

Expectations of a dividend cut have also been fuelled by a 6 per cent reduction in the dividend proposed by Nedbank, which is owned 55 per cent by Old Mutual.

The problem in the US life business came after market volatility, insufficient hedging and a significant strengthening of the dollar, increased the costs associated with providing guaranteed benefits to some holders of US retirement savings products, sold through a subsidiary in Bermuda, to mainly Asian clients.

Separately, Morgan Stanley, broker to Aviva, cut its estimate of Aviva’s 2009 dividend by 25 per cent.

“Although we expect Aviva to hold the final dividend for full year 2008, in our view management should take the opportunity to signal a change for full year 2009,” it said.

However, people familiar with the situation were not aware of such a change in guidance.