NPF Pensions published its 2023 summary audited accounts, providing a short, but insightful overview of the company’s financial health and pension funds’ performance. This report provides a summary review and presents key financial highlights, financial ratios, managed funds’ performance, and the trend in the number of Retirement Savings Account (RSA) holders. Please note: NPF Pensions is only available to members of the Nigerian Police Force.

Financial Highlights

• Total Revenue: Total revenue for the company rose 23% to ₦11.34 billion in 2023, up from ₦9.2 billion in 2022. This increase is attributed majorly to higher fee income generated from the pension funds it has under management, which rose in absolute terms by ₦1.89 billion (21.3%), from ₦8.89 billion to ₦10.76 billion. Income from investing shareholder capital rose by ₦256 million to ₦585 million from ₦329 million.
• Profit After Tax (PAT): PAT rose 6.73% to ₦2.27 billion, up ₦143 million on the previous year’s ₦2.12 billion.
• Operating Expenses: Operating expenses rose faster than both revenue and PAT, up by 43% to ₦8.83 billion from ₦6.14 billion. This increase of ₦2.69 billion led to a double digit increase in the company’s cost-to-income ratio, which rose to 77.83% from 66.78% indicating the company may have succumbed to inflationary pressures which was up ticking most of 2023.
• Shareholder’s Funds: The company’s shareholders ended the year at ₦7.6 billion in 2023 down 3.9% from ₦7.9 billion in 2022.
• Return on Equity (ROE): The ROE closed the year at 29.85%, higher than inflation which closed 2023 at 28.92%.

Financial and Fund Highlights

Corporate Audited Annual Results

Financial Ratios

Fund Performance Highlights

• RSA Funds Performance: NPF Pensions only offers 4 funds to NPF current and retired personnel. All four funds performed better, much better in 2023 than 2022, and all four funds out-performed the industry benchmark returns (see our article on benchmark returns here).

Information at our disposal suggests that the greater out-performance generated by NPF Pensions could have been driven by funds higher than average switch to equities, which had a roaring performance to end 2023 (see below).

5-Year Audited Pension Funds Performance

Number of RSA Holders

• RSA Growth: The number of RSA holders barely grew, adding 719 new accounts (0.22%) in 2023, reaching a total of 323,815 from 323,096 the year before.

Demographic Analysis

• Age Distribution: The majority of 330,000 RSA holders registered in 2023 fell within the age bracket of <30 years to 39 years (83.9%), indicating a young and growing industry subscriber base. Of the 2023 registrations, NPF Pensions recorded the lowest of this growth, 0.22%.

Conclusion

The 2023 audited accounts of NPF Pensions reveal a robust financial performance with notable growth in both total revenue and profit after tax, despite facing inflationary pressures. The company's revenue rose by 23% to ₦11.34 billion, driven primarily by increased fee income and investments. However, operating expenses also grew significantly, impacting profitability. The funds under management performed exceptionally well, outpacing industry benchmarks, largely due to a strategic shift towards equities. Investors are reminded that past performance does not guarantee future results, and careful consideration is advised when making investment decisions.

Watch out for the 2024 Money Counsellors Annual Report on Pensions. MCARP 2023 available here.