Tycoon Wole Oshin’s Custodian posts $42m nine-month profit

Custodian Investment Plc, the Nigerian financial services group run by insurance tycoon Wole Oshin, raised its nine-month profit by 26%, as a surge in interest income and fees more than offset higher expenses.

Profit after tax rose 26.2% to ₦57.59 billion ($42.2 million) in the nine months to Sept. 30, according to the company’s unaudited results. Pre-tax profit climbed 25.5% to ₦66.2 billion ($48.5 million) from ₦52.74 billion a year earlier. Gross revenue jumped 46.9% to ₦255.41 billion ($187.1 million) from ₦173.85 billion, and earnings per share rose 9% to 827 kobo.

Interest income drove much of the growth. It more than tripled, rising 232% to ₦110.14 billion, and now makes up about 43% of gross revenue. Fee and commission income jumped 156% to ₦16.58 billion, and the group’s total investment result rose to ₦123.45 billion from ₦82.39 billion. Sales revenue increased 6.3% to ₦10.3 billion.

The core insurance business was mixed. Insurance service revenue slipped 4.8% to ₦115.85 billion, but insurance service expenses fell 17.7% to ₦58.63 billion, lifting the insurance service result 43.9% to ₦17.65 billion.

Costs rose elsewhere. Management expenses more than doubled, up 119.4% to ₦29.95 billion, and net insurance finance expenses climbed 73.7% to ₦39.39 billion.

Growth slowed in the third quarter. Pre-tax profit for the three months to September rose 3.7% to ₦23.08 billion from ₦22.26 billion a year earlier.

Balance sheet passes ₦1.4 trillion

Total assets rose 31.3% from December to ₦1.4 trillion ($1 billion), and total equity increased 26.4% to ₦276.16 billion. Loans and advances nearly doubled to ₦247.85 billion, and amounts due to customers rose to ₦375.07 billion. Financial assets grew to ₦754.43 billion from ₦596.52 billion, cash and cash equivalents rose 11.3% to ₦193.81 billion, and insurance contract liabilities increased to ₦338.84 billion from ₦270.9 billion.

Cash flow from operations turned negative, with an outflow of ₦27.03 billion, compared with an inflow of ₦26.81 billion a year earlier.

Oshin’s stake

Custodian shares closed at ₦64.70 on Thursday, up 50.5% this year from ₦43, though below the ₦81.25 they reached in June.

Oshin holds 1.61 billion Custodian shares, according to the company’s most recent disclosure. At Thursday’s close, the holding is worth about ₦104.2 billion ($76.4 million), down from about $96 million in June, when his stake was nearing $100 million and he ranked among the largest individual investors on the Nigerian Exchange.

Oshin, Custodian’s group managing director, has built the company into one of Nigeria’s most profitable insurance-led groups, with businesses in life and general insurance, pensions, trusteeship and real estate.

Figures were converted at ₦1,365 to the dollar.