Nigerian Banks are seeking to get a piece of the lucrative Pensions business built by tier-two lender Stanbic IBTC, which booked impressive asset management fees up 18% to N33.35 billion in the 6-months period to June 2023.
That was equivalent to 65% of the total net fee and commission revenue booked by the bank for the period.
In 2022, Tier-One lender, GTCO acquired 100% shares in Investment One Pension Managers Limited at 0.15x asset under management (AUM) while Access Holdings acquired a majority equity stake in First Guarantee Pension Limited.
FCMB Group Plc, in 2021, through FCMB Pensions Limited, acquired a 60% stake in AIICO Pensions Limited at 0.07x AUM.
Herbert Wigwe, Chief Executive Officer (CEO) of Access Holdings said last year that its pensions subsidiary will help lead its next growth phase.
The Nigerian Pension Industry has been on a growth trajectory since the model was changed over a decade ago, thanks to rapidly growing population, compounding population, regulations, and the successful implementation of the Pension Reform Act (PRA) of 2014.
The industry AUM (Retirement Savings Accounts RSA AUMs + Other non-RSA funds) has grown at a 22% compound annual growth rate (CAGR) between 2007 and 2021 (a 15-year period) to N13.42tn in 2021 (US$30.86bn, CAGR of 11%) on the back of rising number of RSA holders, new inflow of funds (contributions less withdrawals) into the funds and net investment gains.
Industry AUM has grown by 11.70% YTD to stand at N16.76 trillion year to date (US$21.7bn) as at 30 June 2023.
