United Capital's Nine Month Profit Jumps 65% to ₦34.8bn as Asset Management Doubles Earnings

United Capital's nine-month profit after tax rose 65% to ₦34.83bn, led by asset management and investment income. Shareholders' funds rose 58% to ₦237bn.

United Capital Plc, the investment banking and financial services group listed on the Nigerian Exchange, reported a 65% jump in nine-month profit after tax to ₦34.83 billion. The result was led by its asset management arm and a near doubling in net investment income, according to unaudited results for the period ended Sept. 30.

Profit before tax rose 66% to ₦41.58 billion from ₦25.01 billion a year earlier, and gross earnings climbed 50% to ₦62.47 billion. Annualised earnings per share were 258 kobo, against 157 kobo.

Group Chief Executive Peter Ashade said the company "ended the third quarter of the year on a remarkable note as demonstrated by the company's strong earnings growth and impressive performance across key financial metrics."

Net investment income rose 95% to ₦22.03 billion. Gross investment income grew 19.8% to ₦138.92 billion, helped by a ₦15.17 billion treasury income line that does not appear in last year's comparison. Interest expense on managed funds and borrowings rose a slower 11.7% to ₦116.89 billion.

Fee and commission income rose 27% to ₦20.95 billion, net trading income rose 29% to ₦12.60 billion, and net gains on financial assets at fair value through profit or loss rose 22% to ₦6.62 billion. Share of profit from associates rose 41% to ₦2.63 billion.

The asset management segment was the standout. Its pre-tax profit more than doubled to ₦16.69 billion from ₦8.17 billion, and its after-tax profit of ₦14.17 billion equals about 41% of the group's total. Securities trading nearly doubled its profit, while wealth management slipped slightly.

Segment figures are before consolidation adjustments. The investment banking figure includes ₦4.81 billion of dividends from subsidiaries that are eliminated in the group accounts. A new segment, labelled UCAMAL, posted an after-tax loss of ₦704 million.

Total expenses rose 28%, well below the 50% growth in gross earnings. The cost-to-income ratio improved to 37.6% from 44.3%, and the pre-tax margin widened to 66.6% from 60.2%. The impairment charge for credit losses fell 61% to ₦367 million.

Some lines rose sharply. General administrative expenses more than doubled to ₦5.32 billion, business development costs rose 166% to ₦1.24 billion, and personnel costs rose 26% to ₦6.42 billion. Education tax rose to ₦2.26 billion from ₦490 million, taking total tax to ₦6.75 billion, an effective rate of 16.2% against 15.4%.

Shareholders' funds rose 58% from December to ₦237.08 billion. The fair value reserve rose 76% to ₦153.55 billion and retained earnings rose 38% to ₦73.62 billion. Other comprehensive income of ₦66.50 billion, mostly fair-value gains on quoted equity investments, made up about 76% of the ₦87.08 billion rise in equity, by our calculation. These gains are not realised profits, and total comprehensive income of ₦101.34 billion was 8.5% lower than a year earlier.

Total assets grew 3% to ₦1.81 trillion. Cash and cash equivalents more than doubled to ₦618.08 billion, while investment securities fell 21% to ₦1.07 trillion. Managed funds grew 4% to ₦1.04 trillion, and borrowed funds fell 14% to ₦320.08 billion after ₦62.85 billion of repayments. Net cash from operating activities was ₦61.24 billion.

Subtracting the half-year results (pre-tax profit of ₦24.78 billion and after-tax profit of ₦21.10 billion) implies third-quarter figures of about ₦16.8 billion and ₦13.7 billion. That is roughly 40% of nine-month profit earned in a single quarter. Shareholders' funds rose about ₦50 billion from ₦187.09 billion at the end of June.

The nine-month pre-tax profit already exceeds the ₦30.10 billion for all of 2024.

"Looking ahead to the final quarter of the year, we are well-positioned to build on our momentum, driven by a continued focus on strong execution, sustainable growth, and long-term value creation for our shareholders," Mr. Ashade said.

The company gave no numerical guidance and announced no new dividend with these results. At the half-year, it declared an interim dividend of 30 kobo per share, or ₦5.4 billion.

The statements were approved by the board on Oct. 23 and signed by Chairman Uche Ike, Mr. Ashade and Group Chief Financial Officer Shedrack Onakpoma. They are unaudited and prepared under IFRS. United Capital was listed in January 2013 and describes itself as the first investment bank listed on the Nigerian Exchange. It has 18 billion shares in issue.

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