PenCom’s new RSA rules could send N2 trillion into Nigerian stocks

United Capital Plc’s Group Chief Executive Officer, Mr. Peter Ashade, has said that the revised Retirement Savings Account (RSA) investment guidelines by the National Pension Commission (PenCom) could unlock more than N2 trillion in fresh institutional inflows into the Nigerian equities market.

Addressing investors and analysts during the maiden edition of the United Capital Investor Relations Roundtable in Lagos, Ashade explained that the higher equity allocation limits across Funds I, II, III and VI-Active would significantly expand pension fund participation in the domestic equity market, improve liquidity and provide long-term funding support for listed companies.

He cited the group’s strong financial performance for the half year (H1 2026) and ongoing capital market reforms as the foundation for seizing the opportunity. Gross earnings rose 58% year-on-year to N37.49 billion, profit before tax climbed 80% to N24.78 billion, and profit after tax increased 77% to N21.10 billion.

What the GCEO is saying:

Presenting the numbers and outlook, Ashade framed the pension reform as a major catalyst for deeper capital market development:

• “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.”

He noted that the pension industry remains one of Nigeria’s largest pools of domestic institutional capital and that the policy change aligns with broader efforts to deepen the market, encourage institutional participation and strengthen investor confidence.

Beyond pensions, Ashade pointed to Nigeria’s potential reclassification to Frontier Market status, the adoption of the T+1 settlement cycle, banking recapitalisation and foreign exchange reforms as additional structural supports for sustained market growth.

He gave credit for the group’s performance to his management team and the heads of subsidiaries, who were present at the roundtable: Mr. Gbadebo Aderenle (Investment Banking), Adetola Fasuyi (Wealth Management), Dr. Odiri Oginni (Asset Management), Esther Adeola-Balogun (UCEE Microfinance Bank) and Adekunle Olugbile (Consumer Finance).

More insights:

Ashade outlined clear priorities for positioning United Capital to benefit from the expected liquidity:

• Growing Assets Under Management and improving spreads from managed funds
• Expanding capital market offerings across investment banking, securities trading and asset management
• Strengthening the InvestNow digital wealth ecosystem to acquire and retain retail investors
• Advancing regional expansion in Ghana and Côte d’Ivoire
• Driving cross-selling across the group’s subsidiaries to increase customer lifetime value

He also highlighted sustainability, responsible investing, and digital financial inclusion as part of the long-term strategy.

Get up to speed:

In its unaudited results for the six months ended 30 June 2026, United Capital reported gross earnings of N37.49 billion (up 58% from N23.76 billion), net operating income of N33.05 billion (up 55%), and a cost-to-income ratio that improved to 44% from 50%.

• Earnings per share rose 75% to N2.34. The Board declared an interim dividend of 30 kobo per share.
• Revenue contributions from the subsidiaries showed broad-based growth:
• Asset Management: N12.99 billion revenue (up 68%), N9.46 billion PBT (up 151%) — about 35% of group revenue and 41% of group PBT
• Securities Business: N5.86 billion revenue (up 85%), N4.03 billion PBT (up 101%) — about 16% of revenue and 17% of PBT
• Investment Banking: N5.62 billion revenue (up 46%), N3.26 billion PBT (up 83%) — about 15% of revenue and 14% of PBT
• Trustees: N4.38 billion revenue (up 47%), N2.65 billion PBT (up 70%)
• Wealth Management: N4.24 billion revenue (up 15%), N2.39 billion PBT (up 8%)
• UC Plus Advance: N2.77 billion revenue (up 38%), N1.87 billion PBT (up 46%)
• UCEE Microfinance Bank: N1.45 billion revenue (up 305%), N436 million PBT (up 913%)
• Fee and commission income contributed N14.3 billion (38% of gross earnings), net investment income N13.8 billion (37%), net trading income N5.0 billion (13%) and other income N4.4 billion (12%).

Managed funds grew 4% year-to-date to N1.04 trillion, while shareholders’ funds rose 25% to N187.09 billion even as total assets declined 7% to N1.64 trillion.

What you should know:

The potential N2 trillion-plus pension inflows have become a key catalyst for deeper liquidity on the Nigerian Exchange and new transaction opportunities across investment banking, securities and asset management — areas where United Capital is already expanding its presence.

• PenCom’s revised Retirement Savings Account (RSA) Fund Investment Guidelines are widely regarded as one of the most significant policy reforms for Nigeria’s capital market in recent years.
• The new framework raises the maximum allocation to ordinary shares across four RSA fund categories—Fund I (35% from 30%), Fund II (33% from 25%), Fund III (15% from 10%) and Fund VI-Active (33% from 25%), giving Pension Fund Administrators (PFAs) greater flexibility to deploy long-term capital into the domestic equities market.
• The reforms are already beginning to influence portfolio allocation. According to PenCom data analysed by Nairametrics, pension fund investments in domestic equities climbed to N5.46 trillion by March 2026 from N3.96 trillion at the end of 2025, reflecting stronger institutional participation following the revised guidelines.

The revised equity limits come as Nigeria’s pension industry has expanded to nearly N30 trillion in assets under management, reinforcing its role as the country’s largest pool of long-term domestic capital.

By allowing PFAs to increase equity exposure while alternative asset availability remains limited, the reforms are expected to deepen liquidity on the Nigerian Exchange, improve price discovery and provide listed companies with a larger base of patient institutional investors.