United Capital in good start as Q1’22 earnings jump 35% to N4.21bn

BY CHARLES ABUEDE

United Capital, the Nigerian investment banking group, continues beating the odds as it sustains a growth trajectory to deliver value to stakeholders posting a 35 percent earnings increase to N4.21 billion in the first quarter of 2022, up from N3.12 billion for the same period last year.

The impressive growth was driven by growth in incomes from fees and commissions, the group stated.

In its unaudited financial statement for the period ended March 31, 2022, filed to the exchange on Wednesday, United Capital also reported a 39 percent year on year increase to N2.31 billion in profit after tax (PAT) from N1.66 billion in the corresponding quarter of 2021.

The company’s PAT margin improved as a result, gaining 1.64 percentage points to 54.81 percent in the first quarter of 2022 compared to 53.17 percent in Q1 2021.

In a similar manner, the company recorded a 36 percent year on year rise in its profit before tax to N2.69 billion from N1.97 billion last year, resulting from a slight gain of 0.52 percentage points in the profitability margin to 63.81 percent in Q1 from 63.29 percent last year.

A look at some of the bottom lines of the company from the report during the review period shows that net operating expenses surged to N3.55 billion, up 14 percent year on year, from N3.1 billion in the same period last year. Operating expenses for the reported quarter hit N1.64 billion, from N1.15 billion last year, representing a rise of 44 percent year on year.

During the reported period United Capital’s cost-to-income ratio rose by 2.33 percentage points largely attributable to a 60 percent increase in other operating expenses, a 30 percent increase in personnel expenses and a 31 percent increase in impairment allowance during the period under review.

Chika Mordi, chairman of the board, speaking on the unaudited financial results, said, “United Capital is on a remarkable growth path as reflected in our strong financial results in Q1-2022. We remain uniquely positioned to increase value delivery to all our stakeholders.”

Peter Ashade, group chief executive, in his comments on the group’s performance, said, “As a financial market player, capital market operator, investment manager, and consumer lender, we play a unique role in expanding service offerings in the financial services ecosystem while creating and distributing wealth amongst diverse stakeholders.

“United Capital is on a sustainable growth trajectory driven by increasing patronage and expanded activities across all our businesses, and market segments that we serve. We kicked off the year 2022 on a sure footing and we are poised to deliver new services and expand into new markets to grow our businesses in line with our three-year growth strategy,” he said.

Elsewhere in the report, the company’s balance sheets showed that United Capital’s total assets appreciated by 2.28 percent year-to-date to N463.93 billion, largely driven by 111 percent growth in cash and cash equivalents during the period under review.

On the other hand, shareholders’ funds declined by 22 percent year-to-date to N23.85 billion from N30.55 billion with retained earnings down by 23 percent year to date due to the impact of N9 billion dividend payout during the period under review.

Following the release of the Q1 2022 result, United Capital said it would be hosting an investors and analysts conference call on Wednesday 27th April 2022 to discuss its performance and the overall outlook for the rest of 2022.