Custodian and Allied Plc today released its financial statements for the year ended December 2017. Gross revenue increased from ₦38.5 billion in 2016 to ₦43 billion in 2017. Profit before tax increased from ₦7.3 billion in 2016 to ₦8.9 billion in 2017. Profit after tax surged from ₦5.3 billion in 2016 to ₦7.3 billion in 2017,the highest in the company’s history.
Custodian declared a final dividend of ₦0.32 per share, bringing the total dividend payment for 2017 to ₦0.42 per share. This amounts to a 35.2% payout ratio.
Investment income was a key driver
Investment income was a key driver behind the company’s stellar performance. Investment income for the group grew from ₦4.2 billion in 2016 to ₦6.2 billion in 2017.
While the company does not give a specific breakdown of its earnings from investment income, it consists of dividend income, interest income as well as discounts on treasury bills and bonds. The same growth pattern was also observed across all segments in 2017.
Investment income for the non life segment rose from ₦1.4 billion in 2016 to ₦1.8 billion in 2017. Investment income for the life segment moved massively from ₦1.8 billion in 2016 to ₦2.8 billion in 2017.
Investment income by the Pension Administration segment also rose sharply from ₦375 million in 2016 to ₦609 million in 2017. Investment income earned by the Trustee segment also had a significant uptick from ₦2.7 billion in 2016 to ₦3.8 billion in 2017.
2017 was marked by a sharp increase in interest rate, partly due to the government ramping up borrowing and in tandem with the jump in inflation rate. Yields on treasury bills were way over 17% last year as a result. The massive increase in interest income is also in line with results from other firms in the financial space.
In a bid to tap in to this, the company doubled down on treasury bills and cut back on bonds. Held to maturity treasury bills increased massively from ₦5.6 billion in 2016 to ₦9.7 billion in 2017. Held to maturity bonds on the other hand fell from ₦16.8 billion in 2017 to ₦11.9 billion.
Custodian and Allied Plc (the company) is the investment holding company that resulted from the successful merger of Custodian and Allied Insurance Plc and Crusader (Nigeria) Plc. The company has interests in life insurance, general insurance, pensions, trustees, property and financial services business.
The company was incorporated on 22 August, 1991 as a private limited liability company under the name, Accident and General Insurance Company Limited. Approval for the change of name to Custodian and Allied Insurance Limited was granted on 5 February, 1993 while approval for conversion to a public limited liability company was given on the 29 September, 2006.
Following a special resolution, the change of name of the company to Custodian and Allied Plc was approved by the Corporate Affairs Commission on 20 March, 2013.