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United Capital grows 9-months profit by most in 5years on high income

United Capital Plc, one of Africa’s leading financial and investment services groups, has recorded its highest nine-month profit in five years in the third quarter of 2021, thanks to the increase in incomes from investment and fees and commission.

The lender saw its profit after tax surge 72 percent to N5.97 billion in nine-month of 2021, compared to N3.46 billion in the same period last year.

Compared to the N4.69 billion profit reported in the nine months of 2016, 2021 N5.97 billion is higher by 27.29 percent. The United Capital’s profit in the nine months to September 2021 is the highest the lender has reported on record, going by the oldest financial report published in 2016 on the Nigeria Exchange Group (NGX) website.

During the period under review, United Capital’s total revenue increased by 60 percent year-on-year driven largely by growth in fee and commission income. The incomes from both sources increased by 112 percent year-on-year and 43 percent, respectively.

Investment income increased to N6.29 billion in the review period of 2021 from N4.39 billion in the comparable period of 2020.

Fee and commission income, on the other hand, was up from N2.25 billion reported in the ninth month to 2020 to N4.77 billion in the same period of 2021.

“I am pleased to inform our stakeholders that United Capital ended the third quarter of the year with another outstanding performance. We delivered increased revenue of 60% year-on-year, PBT growth of 72% year-on-year to N7.09b and total asset growth of 80% year-to-date,” the Group CEO, Peter Ashade, said.

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According to Ashade, United Capital in the period under review successfully listed three series of commercial papers worth N19.72 billion on the FMDQ Securities Exchange. The CPs were issued under the company’s N50 billion commercial paper issuance program.

“This has further positioned us as a company to provide a wider range of wholesale financing solutions to our clients and complement the funding base and support for all our businesses,” the CEO said.

Analysis of the company’s nine-month financial report revealed that it has continued to maintain improvement in its operational efficiency as the cost-to-income ratio for the period declined by 10.25 percentage points largely attributable to the growth in revenue (+64% year-on-year) relative to operating expenses (+44%year-on-year).

United Capital’s operating expenses increased to N4.24 billion in 9M 2021, compared to N2.95 billion in 9M 2020 but its operating income increased at a faster pace to N11.08 billion in 9M 2021, compared to N6.76 billion in 9M 2020

As a result, United Capital recorded an improvement in profitability margin during the period under review as Shareholders’ funds increased by 10 percent year-to-date driven by 8 percent growth in retained earnings despite 4.20 billion dividends payout during the period under review.

United Capital’s total assets during the period under review grew by 80percent year-to-date on the account of 98 percent increase in cash and cash equivalents and 90percent growth in financial asset investment.

Annualized Earnings Per Share increased to 133 Kobo in 2021 (2020: 77kobo). This represents 72 percent growth year-on-year.

“Another remarkable point to note was the Nigerian Stock Exchange’s reclassification of United Capital shares from Low Price Stock Group to Medium Price Stock Group in August 2021 driven by steady growth in the company’s share price over the past months due to our consistent impressive performance over the years.,” the Group CEO said.

The CEO assured its stakeholders that United Capital is optimistic about sustaining the exciting performance in the last quarter of the year and beyond. “We remain focused on our transformation agenda and continue to provide best-in-class solutions to all client segments. We are also committed to delivering superior returns as we seek to always delight our shareholders.”

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