United Capital’s nine-month profit hits record level amid financial advisory boom

United Capital Plc advanced to a new high in profit level from January through September with tremendous growth in its financial advisory business to thank for the milestone.

At N1.9 billion, the cash the investment bank raked in as financial advisory fees – income derived from rendering consulting services to clients – more than doubled the figure posted a year earlier and was the basic hinge of growth at a time investment income, United Capital’s primary revenue source, only saw a passable advance.

The firm broke away from Tony Elumelu-backed United Bank for Africa a decade ago when a policy shift compelled commercial banks to refrain from non-traditional banking services.

Its offerings include debt restructuring, mergers & acquisitions, issuing house services, stockbroking services among others.

Turnover stood 28.4 per cent taller, climbing to N14.5 billion from N11.3 billion. Revenue also found support from net trading income which rose from N15.6 million to N611.9 million.

Also driving revenue, other income leapt to N1.1 billion, 355.7 per cent over what was posted in the same period of 2021.

United Capital’s allowance for credit losses expanded to N1 billion, accelerating by 77.4 per cent, almost entirely driven by loss provision for financial assets at amortised cost.

It received for the period N317.8 million as its own slice of profit from investment in associate companies including Heirs Insurance Limited and Heirs Life Assurance Limited. Return on that investment for the same period last year was a loss of N206.4 million.

Pre-tax profit increased to N9.1 billion from N71 billion, while profit after tax grew 34.5 per cent to N7.7 billion

This May, Financial Times ranked United Capital 62nd on its Africa’s Fastest Growing Companies 2022 list, a rating done using the compound annual growth rate in rate of 75 firms between 2017 and 2020.

Net profit margin for the period is incredibly strong at 53 per cent.