PenCom rules may unlock N2trn for NGX, says United Capital

Revised investment guidelines issued by the National Pension Commission (PenCom) could channel more than N2 trillion of fresh institutional funds into the Nigerian equities market, boosting liquidity and providing long-term capital for listed companies, the Group Chief Executive Officer of United Capital Plc, Peter Ashade, has said.

Speaking at the maiden edition of the United Capital Investor Relations Roundtable in Lagos, Ashade said the higher equity allocation limits under PenCom’s revised Retirement Savings Account (RSA) investment guidelines would significantly increase pension fund participation in the domestic stock market.

He said the reform, alongside broader capital market initiatives, would strengthen liquidity, deepen institutional participation and improve long-term funding for corporates listed on the Nigerian Exchange Limited (NGX).

“The revised RSA Fund investment guidelines present a major opportunity for deeper capital market participation by pension fund administrators, potentially improving liquidity and providing long-term funding support for listed companies,” Ashade said.

According to him, Nigeria’s pension industry remains the country’s largest pool of domestic institutional capital, and the revised framework aligns with efforts to strengthen the capital market and improve investor confidence.

Ashade also identified Nigeria’s potential reclassification as a Frontier Market, the adoption of the T+1 settlement cycle, banking sector recapitalisation and ongoing foreign exchange reforms as additional catalysts expected to support sustained capital market growth.

He said United Capital is positioning to benefit from the anticipated liquidity through expansion of its investment banking, securities trading and asset management businesses, while also growing its digital wealth platform, InvestNow, to attract more retail investors.

The company also plans to deepen its regional expansion in Ghana and Côte d’Ivoire, while strengthening cross-selling across its subsidiaries to improve customer value.

The optimism comes on the back of a strong half-year financial performance by the financial services group.

For the six months ended June 30, 2026, gross earnings rose 58 per cent year-on-year to N37.49 billion from N23.76 billion, while profit before tax increased 80 per cent to N24.78 billion.

Profit after tax climbed 77 per cent to N21.10 billion, while earnings per share rose 75 per cent to N2.34.

The board declared an interim dividend of 30 kobo per share.

Segment performance showed broad-based growth across the group’s businesses.

Asset Management generated N12.99 billion in revenue, up 68 per cent, with profit before tax surging 151 per cent to N9.46 billion, accounting for 35 per cent of group revenue and 41 per cent of profit before tax.

The Securities business recorded N5.86 billion in revenue, representing 85 per cent growth, while profit before tax rose 101 per cent to N4.03 billion.

Investment Banking posted N5.62 billion in revenue, up 46 per cent, with profit before tax increasing 83 per cent to N3.26 billion.

Trustees generated N4.38 billion in revenue, representing 47 per cent growth, while Wealth Management recorded N4.24 billion, up 15 per cent.

UC Plus Advance posted N2.77 billion in revenue, up 38 per cent, while UCEE Microfinance Bank delivered the fastest growth, with revenue rising 305 per cent to N1.45 billion and profit before tax increasing 913 per cent to N436 million.

Fee and commission income contributed N14.3 billion, representing 38 per cent of gross earnings, while net investment income accounted for N13.8 billion or 37 per cent. Net trading income contributed N5.0 billion, while other income stood at N4.4 billion.

Managed funds increased 4 per cent year-to-date to N1.04 trillion, while shareholders’ funds grew 25 per cent to N187.09 billion, although total assets declined 7 per cent to N1.64 trillion.

PenCom’s revised RSA investment guidelines increased the maximum allocation to ordinary shares across four pension fund categories, raising the limit for Fund I to 35 per cent from 30 per cent, Fund II to 33 per cent from 25 per cent, Fund III to 15 per cent from 10 per cent, and Fund VI-Active to 33 per cent from 25 per cent.

The reforms have already begun to influence pension portfolio allocation. PenCom data show pension fund investments in domestic equities rose to N5.46 trillion by March 2026, from N3.96 trillion at the end of 2025.

With Nigeria’s pension assets approaching N30 trillion, analysts believe the revised investment framework could significantly deepen liquidity on the NGX, improve price discovery and provide listed companies with a larger pool of long-term institutional capital.