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2023 PFA Corporate and Pension Fund Accounts for the year ended December 2022 – Guaranty Trust Pension Managers

Background.

Guaranty Trust Pension Managers Limited purchased the share capital of the former Investment One Pensions Limited. The company is now a wholly owned subsidiary of GTCO PLC, one of Nigeria’s largest banking holding companies and is licenced as Pension Fund Administrator (PFA) under the provisions of the Pension Reform Act 2014. As of 31 December 2021, the company had shareholders’ funds of N1.29 billion, as such needed to recapitalise before the deadline of the of the last regulatory induced recapitalisation. As of December 31, 2022, the company had shareholders' funds of N11.63 billion.

NB: we are at times constrained by the amount of data available to conduct extended analysis over some items and some years, hence shortened analysis or DNA (Data Not Available) in some places.

Analysis:

Guaranty Trust Pension Managers ended the 2022 financial year with 87,652 RSA holders in the 6 publicly available RSA funds, an increase of 2,814 RSA holders from 84,838 in 2021. Additionally, assets under management for the 6 audited Retirement Savings Accounts (RSAs) published WAS N30.23 billion, up 36.72% from N22.11 billion in 2021.

Performance Analysis: Company

Company revenue for the year ended December 31, 2022, was up 188% to N1.43 billion, compared to N495.55 million in 2021. Total expenses of managing the business rose by 44% to N692.46 million, from N480.30 million in 2021, leading to a cost-to-income ratio of 48%, down from 97% in 2021. This new low contributed to the fall of the 5 year average cost-to-income ratio to 83%, previously 87%.

Profit After Tax (PAT) for 2022 increased by over 1400% to N492.36 million, compared to N31.07 million in 2021. Shareholders' funds grew to N11.63 billion in 2022 from N1.29 billion in 2021.

Performance Highlights: RSA Funds (audited)

For the year ended 31 December 2022, the Guaranty Trust Pension Managers Fund I appreciated by 8.55%, Fund II appreciated by 9.03%, Fund III by 7.97%, Fund IV by 7.54%, Fund V by 2.24% and Fund VI – Non-Interest (Active) lost 0.27%. Information on the company’s website indicates that the company offers 6 of the 7 PenCom approved funds to the public.

The pension industry does not currently benchmark the performance of any of the funds to any indices. In the absence of any benchmarks to measure fund performances for the year 2022 and to aid readers indirect comparison, the NGX All-Share Index (a measure of performance of the Nigerian stock market) appreciated by 19.98%, the NGX Pension Index appreciated by 16.96%, inflation was 21.47% and MPR closed the year at 16.50%, having risen steadily through the year. 

Guaranty Trust Pension Managers Fund I highlights:

·      Fund performance: up 8.55% in 2022, higher than the 6.96% in 2021 but lower than the 26.55% in 2020.

·      Fund income was N7.1 million in 2022, up 59% from N4.46 million in 2021.

·      Net gains from investing activities rose 53% to N5.15 million in 2022, up from N3.36 million in 2021.

·      Fund size: the size of the fund, measured by net assets, grew almost 29% to N69.67 million from N54.21 million.

·      Fund expense ratio (cost of managing the fund) was 2.80% in 2022, up from 2.03% in 2021. The higher this ratio, it eats into the returns RSA holder’s gain.

·      Asset Allocation as of 31-12-2022: DNA.

·      Performance ranking: The fund performance for 2021 was ranked 8 out of 19 in our 2022 report.

Guaranty Trust Pension Managers Fund II highlights:

·      Fund performance: up 9.03% in 2022, compared to 2.97% in 2021 and 23.80% in 2020.

·      Fund income was up 134% to N2.3 billion in 2022. Though this was up on the N983.46 million in 2021, it was still below the N2.85 billion of 2020.

·      Net gains from investing activities as N1.74 billion in 2022, up 208% in 2021 which was N565.37 million. 2020 was N2.61 billion.

·      Fund size: Fund II continued with the fund growing 35% to N23.49 billion from N17.49 billion in 2021. The fund had grown 25.48% in 2021, 31.68% in 2020.

·      Fund expense ratio: Cost of managing the fund was a high 2.37% in 2022, a slight drop on the 2021 figure of 2.40%.

·      Asset Allocation as of 31-12-2022: DNA.

·      Performance ranking: The fund performance for 2021 was ranked 16 out of 19 in our 2022 report.

Guaranty Trust Pension Managers Fund III highlights:

·     Fund performance: was 7.97% in 2022, compared to 4.82% in 2021 and 29.87% in 2020.

·     Fund income was up 77% to N420.16 million in 2022. Though this was up on the N237.50 million of 2021, it was over 22% lower than the N540.07 million of 2020.

·     Net gains from investing activities in 2022 was N296.07 million, up 109% from N141.68 million in 2021. 2020 was N503.64 million.

·     Fund size: Fund III grew 63% to N5.04 billion from N3.09 billion in 2021. The fund had grown almost 47% in 2020.

·     Fund expense ratio: 2.46% in 2022, down from 3.10% in 2021 but up from 1.59% in 2020. The fund has a 4 year average of 2.34%.

·     Asset Allocation as of 31-12-2022: DNA.

·     Performance ranking: The fund performance for 2021 was ranked 15 out of 19 in our 2022 report.

Guaranty Trust Pension Managers Fund IV highlights:

·      Fund performance: up 7.54% in 2022, compared to 3.02% in 2021 and 27.89% in 2020.

·      Fund income: N160.86 million in 2022, up 83% from N87.87 million in 2021. Both down on the N325.43 million in 2020.

·      Net gains from investing activities: N114.44 million in 2022, up 144% from N46.88 million in 2021. 2020 was N289.72 million.

·      Fund size: Fund IV grew almost 5% to N1.63 billion, from N1.55 billion in 2021 and N1.39 billion in 2020.

·      Fund expense ratio: 2.85% in 2022, up on the 2.64% of 2021 and the 2.57% of 2020.

·      Asset Allocation as of 31-12-2022: DNA.

·      Performance ranking: The fund performance for 2021 was ranked 19 out of 19 in our 2022 report.

Guaranty Trust Pension Managers Fund V highlights:

·  Registered Fund V RSA holders: Guaranty Trust Pension Managers had 993 Fund V RSA holders as of 31 December 2022, up from 829 in 2021. Total industry Micro Pension RSA holders in 2022 were 89,327, giving Guaranty Trust Pension Managers a 1.11% market share.

·    Total assets in the fund: N1.62 million in 2022, up 65% from N1.02 million in 2021.

·    Fund income: Net fund income for the fund was N172,000 in 2022, up 148% from N69,000 in 2021.

·    Net gains from investing activities was N20,000 in 2022, down from N68,000 in 2021.

·    Fund performance was 2.24% in 2022 compared to a fall in the value of the fund by 28.33% in 2021.

·    Performance ranking: The fund performance for 2021 was ranked 14 out of 14 in our 2022 report.