United Capital sees 26% rise in PAT to N3.46bn amid challenging global economic climate

Charles Abuede

United Capital Plc, a Pan-African financial and investment services group, has reported a 26 per cent year on year increase in profit after tax (PAT) in the third quarter of 2020 at N3.46 billion. Last year it had posted N2.75 billion for the corresponding period.

The investment services group, in its unaudited financial results for the period ended September 30, 2020 filed with the Nigerian Stock Exchange (NSE) and accessed by Business A.M., disclosed that during the period under review, it showed significant growth in key indicators despite the challenging global economic climate.

According to the Q3 financials, total revenue soared to N7.07 billion from N5.32 billion in Q3 2019, representing a 33 per cent surge compared to its revenue of Q3 2019. This significant increase, according to the company, is on the back of a strong year-on-year increase of 55 per cent in investment income, 62 per cent increase in fees and commission income, and 61 per cent growth in net trading income.

Similarly, the posted N4.12 billion in profit before tax (PBT) in Q3 of 2020 up from N3.27 billion recorded in the same period of 2019; representing a growth of 26 per cent in year on year PBT.

Disclosing its financial position, the company said total assets grew by 41 per cent year to date to N211.53 billion from N150.46 billion as of 2019 fiscal year, which has been well-financed by a 46 per cent increase in liabilities and a slight increase in Shareholders Fund by 2.5 per cent.

Peter Ashade, chief executive officer of United Capital Group, commenting on the performance of the group, said the business has remained nimble, despite the negative macroeconomic impacts from the exchange rate, uptick in the headline inflation rate, among other things.

“Our operating environment remains tough amid the lingering COVID-19 situation and negative macroeconomic impacts as seen in the continued depreciation of the exchange rate, a consistent uptick in headline inflation rate among other macroeconomic indicators. As stated during the release of our H1-2020 results, our business has not been immune to these challenges.

“Notwithstanding, the group has remained nimble. We continued to implement our business growth and continuity plans premised on a solid risk assessment framework to ensure we remained focused on providing best-in-class solutions to all client segments. These contributed to the impressive growth across our businesses leading to 33 per cent growth in revenue and 26 per cent increase in both PBT and PAT during the nine-month period,” Ashade said.

He further explained that in Q2 the group successfully issued N10 billion Series 1 Bond under the N30 billion Medium Term Debt Programme, the first to be issued by an investment banking firm in Nigeria, which was oversubscribed by about 24 per cent, adding that the company has started yielding the fruit of that strategic decision.

“Going into the last quarter of the year, we are encouraged by the increasing market confidence in our brand even in the wake of the most globally devastating pandemic of the last century. We know the operating environment is turbulent, but we are committed to delivering superior returns to our shareholders, as we drive growth and profitability across all our businesses,” Ashade assured the market.

On strategy for the 2020 business year, Ashade said that the company will continue in line with its initial strategy for the year, adding that it would continue to push further with its market diversification and cost-optimization initiatives, as well as implement phased automation of its business processes, while upholding its commitment to ensuring a significant improvement in value delivery to all its stakeholders.