According to the latest monthly report released by Nigeria’s Pension Commission (PENCOM), the assets under management (AUM) of the regulated pension industry increased by +26.2% y/y to N19.7trn.

Meanwhile on an m/m basis, the AUM decline marginally by -0.5%.

This marks the first decline since September ’22. Notably, FGN debt securities accounted for 62% of the total AUM in March ’24. Meanwhile, other asset classes such as private equities, real estate, and infrastructure funds, accounted for 0.4%, 1.4%, and 0.8% of total AUM, respectively.

Total FGN debt securities held by the Pension Fund Administrators (PFAs) increased by +19.7%
y/y but declined marginally by -1.4% m/m.

Specifically, we note that the FGN bond instruments held by the PFAs increased by +17.2% y/y to N11.5trn, but declined by -2.4% m/m, on the back of a 10-year tenure FGN bond maturity (N719.9bn). The FGN bonds account for 58% of the total AUM.

FGN bonds remain attractive due to its lower risk profile and elevated yields. It is worth noting that the average FGN bond yield increased by +219bps m/m as at end-March ‘24.

The PENCOM report shows that NTBs held by PFAs grew by +120% y/y and increased by +42.5% m/m to N407.6bn in March ’24. We note that the average NTB yield increased by +250bps m/m as at end-March’24.

This asset class accounted for just 2.1% of the total AUM in the same month.

Meanwhile, State government securities held by the PFAs increased by 64.1% y/y to N266.2bn in March ‘24.

It is worth highlighting that domestic equity holdings surged by 99.6% y/y and 8.7% m/m to N2.1trn in the same period, accounting for 10.6% of the total AUM in March ‘24 compared with 9.7% in February ’24. The NGX-all-share index (NGX-ASI) rose by +90.6% y/y and +4.6% during the same period.

Furthermore, YTD (28-March ’24) return on index rose by +18.1% to close at 39.8% from 33.7% in February ’24.

Recently, the market has shown a bearish trajectory as the NGX-ASI declined by -6.1% m/m as at end-April ‘24, partly, on the back of relatively weak corporate earnings amid inflationary conditions. Given expectations of higher yields in the fixed income market on the back of continuous tightening or a hold stance of the CBN at the next MPC meeting, PFAs are likely to reallocate a greater portion of pension assets to fixed income securities.

According to PENCOM, the total pension contributions since inception remitted to the Individual Retirement Savings Account (RSA) increased by +17.3% y/y to N9.9trn as at end-December ‘23 compared with N8.5trn recorded as at end-December ‘22. Remittance from the public sector accounts for 52%, while private sector accounts for 48% of the total pension contributions.

This can be partly attributed to improvement in the efforts to expand pension coverage.

Notably, PENCOM added a total number of 8,927 micro pension contributors in Q4 ’23 bringing the total number of registered MPCs in the Micro pension plan from inception to 114,382 as at end-December ’23 from 89,327 as at end-December ’22.

Guaranty Trust Holding Company (GTCO) Plc, one of Nigeria’s leading financial institutions, has unveiled its first quarter (Q1) financial results for the period ending March 31, 2024.

According to the report submitted to the Nigerian Stock Exchange (NGX), GTCO recorded a 587.5% growth in profit before tax (PBT) to N509.35 billion.

This substantial increase in pre-tax profit represents a significant jump from the N74.089 billion reported in the corresponding period of the previous year.

The financial statement also revealed a 227.93% rise in income tax to N52.213 billion, compared to N15.922 billion in the same period of 2023.

As a result, GTCO’s profit after tax (PAT) for the first quarter of 2024 rose to N457.134 billion, an exceptional growth of 685.9% from N58.167 billion recorded in the first quarter of the previous year.

The strong performance of GTCO can be attributed to several key factors. The Group’s loan book increased by 21.9% rising from N2.48 trillion recorded in December 2023 to N3.02 trillion by March 2024.

Similarly, deposit liabilities grew by 26.0% from N7.55 trillion in December 2023 to N9.51 trillion in March 2024.

Despite the challenging economic environment, GTCO’s balance sheet remained well-structured, diversified, and resilient.

Total assets closed at an impressive N13.0 trillion while shareholders’ funds stood solid at N2.0 trillion.

Commenting on the outstanding financial results, Mr. Segun Agbaje, the Group Chief Executive Officer of Guaranty Trust Holding Company Plc, expressed optimism about the future.

He said the robust performance across all business verticals reaffirmed the value of the Holding Company Structure.

“Our first quarter results reflect the unfolding value of what we have created in all our business verticals through the Holding Company Structure – from Banking and Payments to Funds Management and Pension,” said Mr. Agbaje.

“We are positioned to compete effectively on all fronts and fulfill all our customers’ needs under a unified, thriving financial ecosystem.”

The growth in profitability underscores GTCO’s resilience, strategic focus, and unwavering commitment to delivering superior value to its stakeholders amidst evolving market dynamics.

As the Group continues to leverage its strengths and innovative capabilities, it remains well-positioned to navigate the ever-changing landscape of the financial services industry with confidence and resilience.

United Bank for Africa (UBA) Plc has made a significant leap in its financial performance, reporting a 166% surge in its first-quarter profit to N143 billion.

The details, disclosed in the financial services group’s unaudited report for the first quarter, showed a robust growth trajectory despite challenging market conditions.

This surge translates to a 169.4% year-on-year increase in earnings per share (EPS) to N3.96 in the first three months of the year, up from N1.47 reported in the same quarter of 2023.

According to the financial results, interest income rose by 129.7% year on year to N440.76 billion. The bank also witnessed a significant uptick in investment, reporting a 147.1% year-on-year growth.

UBA’s interest expense saw an increase of 93.9% year on year to N140.09 billion. This was attributed to higher costs incurred on deposits from customers, deposits from financial institutions, and borrowings.

Despite this, customers’ deposits grew by 112.6% year on year to N18.38 trillion.

Net interest income also grew by 151.3% year on year to N300.68 billion from about N120 billion in the previous year.

Furthermore, non-interest income advanced by 38.9% year on year to N77.91 billion, fueled by expansions in net fees and commission income and net FX trading income.

At the end of Q1, UBA’s operating income stood at N373.31 billion, a 122.5% year-on-year increase.

However, operating expenses saw an uptick of 104.1% year on year, driven by expansions in employee benefits, regulatory costs, and inflationary pressures.

Despite these challenges, the group’s profit-before-tax surged by 154.7% year on year to N156.34 billion from N61.37 billion a year ago.

Net profit also increased by 166.1% year on year to N142.58 billion from N53.59 billion in the previous year.

UBA’s stellar performance in the first quarter underscores its resilience, strategic positioning, and commitment to delivering value to shareholders amid evolving market dynamics. As the bank continues to navigate challenges and seize opportunities, it remains poised for sustained growth and value creation in the financial services sector.