Stanbic IBTC Pension Managers Limited’s net income has spiked by 17.58 percent, driven by improvement in interest income as the company continue to deliver return on investment to Retirement Savings Account (RSA) holders.
The company’s robust earnings, improved margins, strong balance, solid working capital position and a higher return on investment to shareholders validates its focus and market penetration strategies.
For the year ended December 2016, Stanbic IBTC Pension Managers’ net income moved to N139.61 billion as against N118.35 billion the previous year.
Total income increased by 6.52 percent to N170.29 billion in the period under review, thanks to a 19.34 percent rise in investment income to N154.60 billion.
The company is efficient amid a tough and unpredictable macroeconomic environment as its cost to income ratio declined to 17.98 percent in December 2016 from 25.65 percent as at December 2015.
Operating costs reduced by 33.03 percent to N30.68 billion in the period under review as the management of Stanbic IBTC Pension Manager spent 17.98 percent of total investment income in running the business.
The cost-to-income ratio shows the efficiency of a firm in minimizing costs while increasing profits. The lower the cost-to-income ratio, the more efficient the firm is running. The higher the ratio, the less efficient management is at reducing costs.
Net margins increased to 81.17 percent in December 2016 from 74.34 percent the previous year. An 81 percent profit margin indicates Stanbic IBTC Pension Managers earns N0.81 in profit for every Naira it collects.
Net profit margin is the ratio of net profits to revenues for a company or business segment. Typically expressed as a percentage, net profit margins show how much of each dollar collected by a company as revenue translates into profit.
Stanbic IBTC Pension Managers has more than N1.7 trillion in assets under management, according to Eric Fajemisin, Chief Executive of the company.
Fajemisin says the above feat reinforces a strong evidence of the company’s proficiency at ensuring safety and return of value on investment to RSA holders through higher standards of service delivery.
While pension assets under management stand above N7.5 trillion, $21 billion, 70 million Nigerians are still locked out of micro scheme.
Despite the inclusion of the informal sector in the contributory pension scheme by the National Pensions Commissions (Pencom), available data from the regulator indicates that around 8 million Nigerians – less than 15% of the labour force – are captured in the CPS.
Analysts attribute the relative underdeveloped pension industry to high employment/underemployment rate, large informal sector and inability of state government to create jobs.
While the country existed a recession in 2017, its unemployment rate has risen to 18.80 percent in the third quarter of 2017, from 14.20 percent the fourth quarter of 2016, according to a recent report by the National Bureau of Statistics (NBS).
Experts are of the view that government has to create an enabling environment of businesses to thrive while copious investment in infrastructure will boost manufacturing activities hence galvanizing in job creation.
The country’s pension to GDP ratio ranks among the lowest in the world.
Nigeria has a pension to GDP ratio of 5 percent, according to research house Tower Watson and co.
This compares to South Africa’s 69 percent pension contribution to the economy; Chile, 65 percent pension contribution to GDP; Malaysia, 61 percent contribution to GDP; South Korean, 35 percent; Mexico, 15 percent contribution to GDP, and Brazil 5 percent contribution to GDP.
Further analysis of Stanbic IBTC Pension Managers’ financial stamen shows total assets has increased by 21.25 percent to N1.54 trillion in the period under review, thanks to an 18.18 percent rise in long term investment to N1.54 trillion.
BALA AUGIE
