First City Monument Bank (FCMB) Group Plc has experienced remarkable growth in its assets under management (AUM), which reached an impressive N910 billion, as revealed in its half-year financial statement for 2023. This represents a substantial 24 percent increase compared to the previous year, largely attributed to the successful acquisition of AIICO Pension Limited a few years ago.
Thank you for reading this post, don't forget to subscribe!Notably, FCMB’s Pensions business played a significant role, contributing 79 percent of the AUM in the second quarter of 2023, although this was slightly down from the 84 percent contribution during the same period in 2022. The bank witnessed a 1.11 percent increase in Retirement Savings Accounts in June 2023, totaling 742,540 accounts. Registrations via the bank’s digital platform were responsible for 63 percent of this growth, compared to 60 percent at the end of 2022.
Nigeria’s pension industry has been on a growth trajectory, driven by factors such as a rapidly growing population, increased allocation of pension assets to equities and real assets, regulatory enhancements, and full enforcement of the PRA 2014 for compliance. Analysts at Chapel Hill Denham believe that industry recapitalization is a catalyst for fast-changing dynamics.
According to the National Pension Commission (PENCOM), as of April 27, 2022, all PFAs had complied with the recent increase in minimum regulatory capital to N5 billion from N1 billion. Notably, the last recapitalization occurred in 2012 when the industry’s AUM was N3 trillion.
FCMB reported that its AIICO Pension transaction positively impacted AUM and profit before tax (PBT), contributing N174.4 billion and N770 million, respectively, in the first six months of 2023. The bank remains on track to achieve its AIICO PBT contribution target of N1.41 billion for the full year of 2023.
In 2021, FCMB acquired all shares of AIICO Pension Limited, believing that the combined entity would be better positioned for stronger organic asset management. The bank is also awaiting final approval from the SEC for its upcoming Alternative Assets Fund, with hopes of securing it in the third quarter of 2023.
