Fidelity Pension Managers weeks after publicizing its audited accounts for the 2023 financial year, have become a major talking point for analysts, regarding its financial health and performance.
The report provided a summary review and key financial highlights at given ratios, as well as the performance of funds and the trend in the number of Retirement Savings Account (RSA) holders.
Total revenue for the company rose 23% to N2.59 billion in 2023, up from N2.1 billion in 2022. From the reports, this increase is attributed majorly to higher fee income generated from the pension funds it has under management. Profit After Tax (PAT) rose by 26% to N666 million, up on the previous year’s 21% rise.
Operating expenses rose slower than revenue and PAT by 22% to N1.76 billion from N1.44 billion, leading to a slight drop in the company’s cost-to-income ratio, which fell to 67.98% from 68.57%. The company seems to be relatively prudently managing financial resources, amidst rising costs and inflationary pressures. The company’s shareholders’ funds ended the year at N5.95 billion in 2023 up 5% from N5.64 billion in 2022. ROE was a very low 11.21%. Whilst this is a slight improvement on 2022’s 9.41%, the company does not seem to be efficiently deploying shareholders’ equity to generate profits.
Fidelity Pensions offers six of the seven regulated RSA pension funds to the public. Notably, all six funds put in a better performance than the previous year, whilst only four funds outperformed the industry benchmark returns (see our article on benchmark returns here). The growth in the number of RSA holders was another highlight of the year. Fidelity Pension Managers saw an increase of 2.48% in RSA holders, adding 8,005 new accounts to close the year at 331,124 RSA holders.
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, Fidelity Pension Managers recorded 2.43% of this growth.
A source said “Fidelity Pension Managers has demonstrated improved financial growth in 2023, marked by increased revenue, higher profitability, and a growing RSA customer base”, but added that “the company remains constrained by low assets under management, which limits its fee-generating potential.”
To overcome this challenge, Fidelity Pension Managers was advised to “focus on enhancing the performance of funds and attract more RSA holders.”
It was concluded that “improved fund performance will not only benefit current RSA holders, but also make Fidelity Pensions an attractive option for RSA transfers by workers.
