Business

Analysis: Industry leader, Stanbic IBTC Pension post N25.79 billion profits in 2023

Stanbic IBTC Pension Managers recently published its 2023 corporate and pension fund audited accounts, providing a summary overview of its financial health and fund performance.

This report provides a summary review and presents key financial highlights, financial ratios, fund performance, and the trend in the number of Retirement Savings Account (RSA) holders.

Financial Highlights

  • Total Revenue: The audited accounts revealed a 16% increase in total revenue, growing to ₦61.01 billion in 2023, up from ₦52.94 billion in 2022. Fee income from managing pensions rose 15.6% with the balance majorly being made up from investment income.
  • Profit After Tax (PAT): PAT rose 11.6% to ₦25.79 billion, reflecting a higher growth rate than the previous year’s 5.1% growth rate when PAT came in at ₦23.12 billion.
  • Operating Expenses: Operating expenses rose faster than revenue and PAT by 23% to ₦22.52 billion from ₦18.75 billion, leading to a rise in the company’s cost-to-income ratio to 36.92% from 34.81% indicating the company feeling the inflationary pressures in the country.
  • Shareholder’s Funds: Company’s shareholders fund ended the year at ₦63.07 billion in 2023 down 8% from ₦68.68 billion in 2022.
  • Return on Equity (ROE): ROE rose to an eye watering 40.90%, way above the December 2023 inflation rate which closed at 28.92%.

Financial and Fund Highlights

Corporate Audited Annual Results

Financial Ratios

Fund Performance Highlights

  • RSA Funds Performance: Stanbic IBTC Pensions offers all 7 of the regulated RSA funds to the public. All 7 funds performed better in 2023 than they did in 2022 (see table above), but one fund, underperformed when compared to each’s respective 2023 industry benchmark (see our article on benchmark returns here). None of the funds outperformed inflation, which closed December 2023 at 28.92%.

5-Year Audited Pension Funds Performance

Number of RSA Holders

  • RSA Growth: The number of RSA holders grew by 4.17% in 2023, reaching a total of 2,075,094, up by 83,005 from 2022.

Demographic Analysis

  • Age Distribution: The majority of 330,000 RSA holders (83.9%) registered in 2023 fell within the age bracket of <30 years to 39 years, indicating a young and growing industry subscriber base. Of the 2023 registrations, Stanbic IBTC Pension Managers recorded the largest share 25.17% of this growth.

Conclusion

Stanbic IBTC Pensions continues to set the pace in the industry. The company continues to demonstrate stable financial health for its shareholder in 2023. Revenue growth continues in the mid-teens, and it maintains an industry beating cost-to-income ratio. In terms of fund management, as with the whole industry, improvements in returns can and need to be made, especially as inflation is a silent tax that robs current and future pensioners if investment returns are below inflation. Improved investment performance will be welcome by current RSA holders as well as anyone looking to use the transfer window to move to Stanbic IBTC Pensions.


This article was written by Michael Oyebola. Watch out for the 2024 Money Counsellors Annual Report on Pensions. MCARP 2023 available here.

© MoneyCounsellors.com


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