United Capital's annual profit plummets despite record N27bn revenue
Financial services and investment group United Capital increased its turnover by around half to 26.9 billion naira last year, its highest turnover since its inception it 21 years ago.
But an analysis of its finances by PREMIUM TIMES showed that the milestone could not increase its profits due to the requirement to meet certain costs.
The holding company, which divorced from United Bank for Africa in 2022 and now operates on its own, has relied on revenue from its flagship investment banking division to drive revenue growth over the past t was a year in which revenues from managed funds were particularly strong.
Investment income jumped 55.3% to N13.8 billion, while fee and commission income of N8.1 billion increased by 31.9%.
United Capital, whose offerings also include issuing house, asset and wealth management, mergers and acquisitions, trust and brokerage services, owes the improvement in the latter to rising financial advisory fees as well as management fees and other commissions.
Profits have been hit the hardest by the need to set aside up to 6.2 billion naira of revenue to cover loans made by the institution, which have a slim chance of be reimbursed.
This compares to N453.5 million allocated for this purpose in the same period of 2021, according to its audited financial report released on Wednesday.
United Capital operates a consumer finance unit UCPlus Advance Limited through which it lends to customers using a digital platform. The company told PREMIUM TIMES that it is preparing to officially launch its digital banking subsidiary.
Pre-tax profit fell from N11.9 billion to N13.5 billion. Taxation increased nearly fivefold to N3.8 billion, hurting net profit which, at N9.7 billion, was 14.3% below the 2021 level.
>"We remain optimistic that our performance will continue in 2023 after starting the year in a strong financial position with almost N1 trillion in funds under management," CEO Peter Ashade said in a separate document. featuring performance highlights.
A memo also released on Wednesday details the board's plan to pay a dividend of 1.50 naira per share for the year, a payout of 9 billion naira, the same amount it paid for 2021.
Shares of the company had fallen 3.9% at the close of trading in Lagos on Wednesday.
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Financial services and investment group United Capital increased its turnover by around half to 26.9 billion naira last year, its highest turnover since its inception it 21 years ago.
But an analysis of its finances by PREMIUM TIMES showed that the milestone could not increase its profits due to the requirement to meet certain costs.
The holding company, which divorced from United Bank for Africa in 2022 and now operates on its own, has relied on revenue from its flagship investment banking division to drive revenue growth over the past t was a year in which revenues from managed funds were particularly strong.
Investment income jumped 55.3% to N13.8 billion, while fee and commission income of N8.1 billion increased by 31.9%.
United Capital, whose offerings also include issuing house, asset and wealth management, mergers and acquisitions, trust and brokerage services, owes the improvement in the latter to rising financial advisory fees as well as management fees and other commissions.
Profits have been hit the hardest by the need to set aside up to 6.2 billion naira of revenue to cover loans made by the institution, which have a slim chance of be reimbursed.
This compares to N453.5 million allocated for this purpose in the same period of 2021, according to its audited financial report released on Wednesday.
United Capital operates a consumer finance unit UCPlus Advance Limited through which it lends to customers using a digital platform. The company told PREMIUM TIMES that it is preparing to officially launch its digital banking subsidiary.
Pre-tax profit fell from N11.9 billion to N13.5 billion. Taxation increased nearly fivefold to N3.8 billion, hurting net profit which, at N9.7 billion, was 14.3% below the 2021 level.
>"We remain optimistic that our performance will continue in 2023 after starting the year in a strong financial position with almost N1 trillion in funds under management," CEO Peter Ashade said in a separate document. featuring performance highlights.
A memo also released on Wednesday details the board's plan to pay a dividend of 1.50 naira per share for the year, a payout of 9 billion naira, the same amount it paid for 2021.
Shares of the company had fallen 3.9% at the close of trading in Lagos on Wednesday.
Support the integrity and credibility journalism of PREMIUM TIMES Good journalism costs a lot of money. Yet only good journalism can guarantee the possibility of a good society, an accountable democracy and a transparent government. For free and continued access to the best investigative journalism in the country, we ask that you consider providing modest support to this noble endeavour. By contributing to PREMIUM TIMES, you help sustain relevant journalism and keep it free and accessible to everyone.Donate
[embedded content]TEXT ANNOUNCEMENT: Call Willie - +2348098788999
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