Nigerian Exchange Group Plc (NGX Group) achieved N6.959 billion from transaction fees and treasury investment income in the financial year ending December 31, 2023. This was disclosed in the group’s 2023 annual financial report, reviewed by.
Significant Revenue Growth
The N6.959 billion figure marks a 34.19% increase from the N5.187 billion reported in 2022, comprising 83.85% of the group’s total revenue of N8.299 billion.
Key Revenue Drivers
- Transaction Fees: The primary revenue driver was transaction fees, which brought in N4.818 billion, up from N3.157 billion in 2022, representing a growth of 52.6%. This segment accounted for 58% of the total revenue.
- Treasury Investment Income: Income from treasury investments, including bonds, treasury bills, and fixed deposits, totaled N2.141 billion, a 5.47% increase from N2.030 billion in 2022. This income contributed 25.79% of the total revenue.
Impact of Interest Rates
The Central Bank of Nigeria’s (CBN) decision to raise the interest rate to 24.75% is expected to benefit the NGX Group and similar institutions by increasing returns from treasury investments. The CBN’s Monetary Policy Committee increased the benchmark interest rate by 200 basis points from 22.75% to 24.75%.
Economic Implications
Investment experts note that higher interest rates typically shift investor preference from stocks to money market instruments, whereas lower rates tend to drive funds towards the stock market.
Financial Highlights
- Profit After Tax: NGX Group reported a profit after tax of N5.250 billion for 2023, a substantial increase of 788% from the N591.509 million recorded in 2022.
- Pre-Tax Profit: The group’s pre-tax profit rose to N5.271 billion, a remarkable 636% increase.
- Total Income: NGX Group’s total income surged to N11.803 billion, reflecting a 57.39% increase from N7.499 billion in FY 2022.
The group’s financial report was officially released to the Nigerian Exchange Limited and made available to the investing public
Conclusion
NGX Group’s strong financial performance in 2023 highlights the significant growth in transaction fees and treasury investment income, driven by strategic financial decisions and favorable economic conditions.