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United Capital posts strong half-year earnings despite headwinds

United Capital plc

United Capital plc

For shareholders of United Capital plc, the first half of 2016 will go down as a remarkable one, irrespective of the economic turbulence in the country, as the company’s report showed that it earned a profit after tax of N3.6 billion for the first half, representing a 155 percent increase compared with 2015.

The achievement, according to a statement from the investment banking and financial services firm in Africa, is as a result of closing strategic transactions in the financial services and power sectors this year, “Including tailor-made financial services solutions to individuals, corporate and public sector clients.”

Oluwatoyin Sanni, group CEO of the company, said, “After a profitable 2015, we knew that 2016 would require us to re-strategise and think creatively on how we would surpass our goals without reducing the quality of services that we provide to our stakeholders. We also understand that due to reduced liquidity in the market, investors would be more circumspect about how their funds are invested. Therefore, we needed to ensure we remained true to our mission of providing superior investment services to investors, notwithstanding market challenges.”

For United Capital, the macroeconomic challenges in the Nigerian market presented an opportunity to expand its services beyond Nigeria this year, executing on its pan-African vision by advising on key financing deals within and outside the country.

“United Capital plc has given investors a reason to be optimistic during these uncertain times. The significant growth in funds under management demonstrates clients’ growing trust in United Capital to not only preserve capital but generate consistent excess return in a volatile economic environment,” Toyin Awesu, head, marketing and corporate communications for United Capital, said.

A breakdown of the report showed return on equity (ROE) increased from 26 percent to 33 percent – arguably the highest for any financial services group listed on the Nigerian Stock Exchange. Also, Assets under Management (AuM) grew from N109.1 billion in the first half year of 2015 to N125.9 billion in the first half year of 2016, as clients opted for the “intelligent choice” for their investment solutions, resulting in a 15 percent growth in AuM.

The performance is an indication that the company is on course to deliver the desired returns for shareholders by the end of the year, in spite of the difficult operating environment.

“As I promised shareholders at this year’s annual general meeting in April, we are committed to continuous improvement in our operations as we strive to build a company we can all be proud of i.e Africa’s leading investment banking group. We greatly appreciate the continued support of our clients from all geographies and thank them for believing in us,” Sanni said.

Aside from providing world-class services, the company also attributed its success to a growing market share and a commitment to the 2016 corporate theme of ‘Effectiveness and Efficiency,” which it said had been implemented in every aspect of the firm’s operations and processes.