Premium Pension Profit Climbs 35% as AUM Grows to N860bn
Premium Pension Limited

Premium Pension Profit Climbs 35%, AUM Hits N860bn

Driving its profit higher by more than 35%, Premium Pension Limited’s assets under management printed at N860 billion in the financial year 2022. The company ended the year with a total of 772,885 retirement savings accounts (RSA) holders under its watch.

Detail from the company’s audited financial statement for the year showed that total RSA assets under management printed at N860.43 billion, according to MoneyCounsellors, a research, data and information company founded by Michael Oyebola, former managing director at FBN Quest Asset Management.

In the period, the pension manager reported that its total income for the year ended 31 December 2022 grew 18.34% to N10.04 billion from N8.48 billion the year before amidst aggressive market penetration.

Having climbed over the previous 4 years, the company’s cost-to-income ratio went down to 60.27% from 64.65% the year before, according to analysts’ review, noting that this ratio has now averaged 60.65% over the last 5 years.

In 2022, the company’s profit after tax (PAT) grew 35.51% to N2.65 billion, it financial scorecards show. This stemmed the falling tide as PAT had been falling over the prior 3 years.

This growth in PAT boosted Premium Pension’s return on equity (RoE) which closed the year at 37.33%; stemming the declines which started in 2018 when the company had an ROE of 62.94%.

Following an improved performance, its shareholders’ funds grew 10.64% to N7.11 billion from N6.43 billion in the financial year 2021.

Premium Pension offers all 7 PenCom approved funds to the public.

Income earned in the Premium Pension Fund I grew triple digits, 211% to N60.84 million from N19.56 million in 2021, with net gains from investing activities rising to N49.73 million from N14.46 million.

The funds’ expense ratio – the figure that captures the annual cost of managing the fund – rose to 1.80% from 1.37%. Over the last 5 years, the ratio has averaged 1.70%. The fund managers generated a return of 10.71% in 2022 compared to 5.70% in 2021.

Analysts noted that the fund underperformed the stock market (19.98%), and its returns were lower than inflation (21.47%) and even lower than MPR (16.50%).

In 2021 the fund ranked 11 out of 19 in terms of performance. Income earned in the Premium Pension Fund II grew 65.17% to N44.01 billion from N26.64 billion in 2021, with net gains from investing activities rising to N37.57 billion from N21.06 billion.

The funds’ expense ratio rose slightly to 1.68% from 1.63%. Over the last 5 years, the ratio has averaged 1.95%, hence some improvements taking place.  The fund managers generated a return of 10.87% in 2022 compared to 6.73% in 2021.

The fund also underperformed the stock market (19.98%), its returns were lower than inflation (21.47%) and even lower than MPR (16.50%). In 2021 the fund ranked 10 out of 19 in terms of performance, Moneycounsellors’ analysts said.

Income earned in the Premium Pension Fund III grew 38.24% to N38.68 billion from N27.98 billion in 2021, with net gains from investing activities rising to N33.18bn from N23.12 billion.

The funds’ expense ratio rose marginally to 1.53% from 1.52%. The 5-year average has been 1.42%. The fund managers generated a return of 10.13% in 2022 compared to 7.62% in 2021.

The fund also underperformed the stock market (19.98%), its returns were lower than inflation (21.47%) and even lower than MPR (16.50%). In 2021 the fund ranked 13 out of 19 in terms of performance.

Income earned in the Premium Pension Fund IV grew 35.40% to N11.42bn from N8.44bn in 2021, with net gains from investing activities rising to N10.50bn from N7.74bn.

The fund’s expense ratio was 0.83% compared to 0.71% in 2021. The 5-year average has been 0.84%. The fund managers generated a return of 10.59% in 2022 compared to 8.82% in 2021.

The fund also underperformed the stock market (19.98%), its returns were lower than inflation (21.47%) and even lower than MPR (16.50%). In 2021 the fund ranked 7 out of 19 in terms of performance.

Income earned in the Premium Pension Fund V grew 194.82% to N1.71 million from N0.58 million in 2021, with net gains from investing activities rising to N1.47mn from N0.39 million. The funds’ expense ratio fell to 1.21% compared to 1.61% in 2021.

The fund managers generated a return of 10.29% in 2022 compared to 7.22% in 2021. The fund also underperformed the stock market (19.98%), its returns were lower than inflation (21.47%) and even lower than MPR (16.50%).

 In 2021 the fund ranked 9 out of 14 in terms of performance, according to MoneyCounsellors analysts report.

Income earned in the Premium Pension Fund VI (Active) grew to N386.07 million from N36.91 million in 2021, with net gains from investing activities rising to N327.59 million from N30.75 million. The fund’s expense ratio had a big leap to 1.37% from 0.33%.

The fund managers generated a return of 10.22% in 2022 compared to 2.88% in 2021 (2021 was a partial year). The fund also underperformed the stock market (19.98%), its returns were lower than inflation (21.47%) and even lower than MPR (16.50%).

In 2021 the fund ranked 4 out of 11 in terms of performance. Income earned in the Premium Pension Fund VI (Retiree) grew to N84.43 million from N3.5 million in 2021, with net gains from investing activities rising to N77.46 million from N3.02 million.

The fund’s expense ratio was 0.81%, up from 0.25%. The fund managers generated a return of 11.67% in 2022 compared to 1.89% in 2021 (2021 was also a partial year). The fund also underperformed the stock market (19.98%), its returns were lower than inflation (21.47%) and even lower than MPR (16.50%).

In 2021 the fund ranked 2nd out of 5 in terms of performance, MoneyCounsellors’ analysts reported.

Overall, analysts said it’s too early to form an opinion as to the overall performance trend of these funds and in comparison, to its peers, but generally, the company custodians are generating better returns for the company’s shareholders with a 2022  ROE of 37.33%.

Premium Pension Limited was incorporated in March 2005 and was licensed by PenCom as a Pension Fund Administrator (PFA) in November 2005. #Premium Pension Profit Climbs 35%, AUM Hits N860bn

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