Oak Pensions: 2023 Audited Accounts Summary

Oak Pensions published its 2023 audited accounts. This is a summary review and it presents key financial highlights, financial ratios, fund performance, and the trend in the number of Retirement Savings Account (RSA) holders.

Financial Highlights

• Total Revenue: Total revenue for Oak Pensions rose 23% to ₦2.55 billion in 2023, up from ₦2.08 billion in 2022. A breakdown shows that the increase is attributed to higher fee income generated from the pension funds it has under management, which rose 18% to ₦1.88 billion from ₦1.59 billion and a 42% rise in investment income from managing internally generated revenue which rose to ₦652 million from ₦461 million.
• Profit After Tax (PAT): PAT rose 20% to ₦676 million, down on the previous year’s 63% rise.
• Operating Expenses: Operating expenses rose faster than revenue and PAT by 26% to ₦1.78 billion from ₦1.41 billion. This caused the company’s cost-to-income ratio to rise from 68% to 70%, indicting the company also feeling the cost and inflationary pressures in the country.
• Shareholder’s Funds: The company’s shareholders funds ended the year at ₦5.93 billion in 2023 up 4% from the ₦5.69 billion in 2022.
• Return on Equity (ROE): ROE was a low 11.41%. Whilst this is a slight improvement on 2022’s 9.92%, the company does not seem to be efficiently deploying shareholders’ equity to generate profits as over the last 5 years ROE has averaged just 14.02%.

Financial and Fund Highlights

Corporate Audited Annual Results

Fund Performance Highlights

Note: The summary audited accounts published by Oak Pensions did not include the audited NAV per unit for each respective fund. As such we have used the 31 December 2023 NAV published on the company’s website which has been calculated and published in accordance with PenCom regulations.

• RSA Funds Performance: Oak Pensions offers six of the seven regulated RSA pension funds to the public. Notably, four of the six funds put in a better performance than the previous year (prior year data on two funds were not available). Only 4 of the six funds out-performed the industry benchmark returns (see our article on benchmark returns here).

5-Year Unaudited Pension Funds Performance

Number of RSA Holders

RSA Growth: The growth in the number of RSA holders was another highlight of the year. Oak Pension Managers saw an increase of 4.22% in RSA holders, adding 9,672 new accounts to close the year at 238,773 RSA holders.

Demographic Analysis

• Age Distribution: The majority of 330,000 RSA holders (83.9%) registered in 2023 fell within the age bracket of <30 years to 39 years, indicating a young and growing industry subscriber base. Of the 2023 registrations, Oak Pension Managers recorded 2.93% of this growth.

Conclusion

The 2023 audited accounts of Oak Pensions reveal a year of steady progress. The company's total revenue saw an increase of 23%, reaching ₦2.55 billion, driven by a rise in fee and investment income. Despite a 20% rise in profit after tax, operating expenses grew faster, leading to a slight increase in the cost-to-income ratio. The shareholders' funds experienced a modest growth of 4%, while the return on equity, although improved, highlighted the need for more efficient deployment of equity.

Fund performance was mixed, with four out of six RSA funds outperforming the previous year and the industry benchmarks. The growth in the number of RSA holders was another highlight, with a 4.22% increase.

Overall, Oak Pensions has demonstrated some level of resilience and growth amidst economic challenges.

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