FCMB Group has notified the Nigerian Stock Exchange, NSE, that its pensions arm, FCMB Pensions Limited, has entered into an agreement to acquire 96% of AIICO Pensions Limited.
A statement by FCMB Pensions said the move was part of a strategy to grow the Group’s investment management portfolio and build on the inherent synergies between pensions and banking.
It noted that the acquisition is one of several proactive steps, along with digitization, that the company had embarked on to enhance its market position and competitiveness, as the industry braces itself for the commencement of Retirement Savings Account, RSA, portability.
Speaking about the announcement, Mr. Ladi Balogun, Chairman of the Board of Directors, FCMB Pensions, remarked that “the business intends to use its scale to positive effect towards investing in the growth of the Nigerian economy while ensuring safety and the most competitive returns for its customers.”
Also reacting to FCMB’s latest move, analysts have expressed positive views of its impact on both FCMB Pensions and the Group. One investment banking analyst described it as “a positive move and a statement of intent from FCMB’s management to leverage its non-banking businesses to drive profitability.”
Another analyst saw it as a “landmark transaction giving a mid-tier player a great opportunity to bulk up,” adding that “we believe the combined entity will be better positioned for stronger organic assets under management, AUM, growth and fee income contribution to the Group’s performance.”
Meanwhile, with the 2019 acquisition of Legacy Pensions, FCMB Pensions has grown its assets AUM to N325 billion with 350,000 customers as of March 2020, while that of AIICO Pensions is estimated at N126 billion with over 240,000.
A combined AUM of N451 billion and almost 600,000 customers will take the entire Group’s customer base to 8,000,000 and its total AUM (inclusive of all investment management activities) to over N560 billion.
The enlarged pension business will also benefit from FCMB’s extensive distribution platform, comprising of 200 branches, a strong web and mobile presence and the recent launch of its pensions’ online enrolment platform.
In a related development, FCMB Pensions has strengthened its investment committee with the addition of Mrs. Titi Odunfa Adeoye to its Board of Directors.
Mrs. Adeoye is the Founder and Chief Investment Officer of Sankore. The new Director holds an MBA from Harvard Business School, a BBA in Accounting from Howard University and is a Certified Public Accountant (Gold Award).
Mrs. Adeoye has worked with Goldman Sachs in New York and her area of expertise is strategies for the creation, growth and preservation of individual or family wealth with a focus on “alternative” asset classes.