Investment firm, United Capital, grew its profit in the third quarter by 9.76 per cent to N8.47bn from N7.72bn in the same period in 2022.
This was revealed in the Unaudited Consolidated and Separate Financial Statements for the Period Ended 30 September 2023 filed with the Nigerian Exchange Limited.
The company, which offers investment banking, financial advisory, trusteeship, and fund management, among other financial services reported total expenses of N8.26 billion during the 9-month period of 2023, compared to N5.74 billion in the same period of 2022.
Other operating expenses accounted for the largest share of United Capital’s total expenses, at 59 percent. Personnel expenses followed, at N2.15 billion, and impairment of credit loss amounted to N1 billion.
The firm incurred fines of N12.18 million from N1.45 million recorded in the same period of 2022.
The fine during the period under review was a result of reporting and presentation errors in the filing of Trustees’ investment portfolio returns to the Securities and Exchange Commission.
Despite the challenging economic environment, United Capital recorded a 9.7 percent growth in its profit after tax, reaching N8.47 billion, up from N7.71 billion in 2022.
This was primarily driven by investment income, even though some of the company’s main revenue streams saw declines compared to the previous year.
The major contributor to revenue was net investment income, totalling N46.81 billion during the review period. However, a significant portion of this income was offset by high-interest expenses in the fund management sector, amounting to N37.86 billion.
The Central Bank of Nigeria had raised the benchmark interest rate to 15.5 percent by September 2023, marking the third consecutive hike in the year.
Both fees and commission income, as well as net trading income, declined in 2023. Fees and commission income dropped to N5.74 billion, down from N6.29 billion in 2022, while net trading income decreased to N315.2 million from N611.9 million in the previous year.
In contrast, other income increased by 74.8 percent to N1.97 billion during the 9-month period of 2023.
United Capital’s gross earnings amounted to N17.5 billion, reflecting a 20.4 percent increase compared to the previous year.
The firm also earned N28.8 billion in other comprehensive income, primarily from fair value gains on investments in equity and debt instruments.
This contributed to a total comprehensive income of N37.2 billion for the period, an increase from the N8 billion reported in the same period of the previous year.
The company’s cash flows for the 9-month period of 2023 were as follows: Net cash generated by operating activities amounted to N61.4 billion, net cash generated by investing activities amounted to N21.83 billion, and net cash used in financing activities amounted to N6.61 billion.
As of the end of the period, the company’s cash and cash equivalents amounted to N240.13 billion.
The financial services group this year ventured into consumer finance after obtaining a licence from the Central Bank of Nigeria to set up a microfinance bank, allowing it to expand its business activities and potential earnings even further.