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Stanbic IBTC Pension fund’s AUM top N1trn mark

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Stanbic IBTC’s N1.005trn in assets under management (AUM) accords it a whopping 24.67 percent of the Nigerian Pension Fund industry, making it the largest in the country.

Total Pension Fund Assets (industry size) currently stands at N4.058trn according to latest PenCom data.

Stanbic IBTC has one of the largest contributor base in the industry. Its member’s contributions of N627.17bn as at 2013 account for close to 30 percent of total pension contributions in the country.

In its audited financial reports for FY2013, Stanbic IBTC Pension total income increased by 39.7 percent to N101.59bn, up from N72.72bn the previous year, a combined analysis of its RSA and RSA Retiree Fund shows.

Interest income from assets continued to be the biggest contributor to the PFA’s balance sheet, the report showed.

Surplus for 2013 increased 39 percent to N83.44 bn from N59.89 bn in the previous year.

Also, contributors’ fund grew by 25.28 percent, from N563.04bn to N705.38bn, while total assets (RSA-Retiree and RSA combined) under the management (AUM) swelled by 35.26 percent to N1.005trn, up from N743bn the previous year.

The firms total expenses increased by 41.25 percent to N18.16bn up from N12.83bn in 2012.

Total Pension contribution to PFAs (country-wide) as at Q3 2013 stood at N2.12trn with 5,796,979 million contributors (PenCom). With a current workforce of about 54 million people, Nigeria’s current N4.05 trillion (in assets) Pension industry can easily grow ten-fold in the not too distant future as PenCom continues to ensure that more workers are included in the scheme.

The Fund manager’s investment portfolio for August reveals that it has invested 76.37 percent of its funds in Government Bonds, 18.17 percent invested in equities, and 3.7 percent in the money market. The remaining funds being invested in both corporate bonds and other fixed income assets.

PFAs typically concentrate on lower-return, lower-risk investments, usually heavily lopsided towards government bonds and money market instruments. According to PenCom standards, PFAs are allowed to invest up to 80 percent of their funds in FGN / CBN bonds, a maximum of 25 percent on equities, maximum of 35 percent in the money market, 5 percent in private equity and 5 percent in infrastructure funds.

Consistent performance of Nigerian T- bills and FGN Bonds has contributed in buoying the performance of the PFA as the Fund’s investment portfolio show.

A 2009 report by International Financial Services London, a think tank, found that those pension systems whose investments were most heavily weighted towards domestic government bonds were best insulated from the effects of volatility in financial markets.
However, given the impressive increase in AUM, the scope for medium-term growth and the still-sizable number of formal sector employees who are not yet enrolled in the pension scheme – the potential for leveraging pension fund assets to deepen Nigeria’s capital markets is enormous, said a report by the Oxford Business Group

Article Credit: Businessdayonline

Updated 4 Years ago

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Tags:     AUM     Stanbic IBTC’s