NGX Group generates N6.96 billion in transaction fees and treasury investment revenue

Nigerian Exchange Group Plc earned N6.959 billion from transaction fees and treasury investment income in the fiscal year ended December 31, 2023.

Nairametrics was able to view the group’s 2023 annual financial report, which included this information.

The sum is a 34.19% increase over the N5.187 billion the group recorded in 2022, and it also collectively accounts for 83.85% of the N8.299 billion in overall income.

Subsequent investigations reveal that transaction fees, which accounted for N4.818 billion in 2023 compared to N3.157 billion in 2022, represented a 52.6% increase in the group’s revenue. 58% of the N8.299 billion in total income came from this segment.

Additionally, revenue from bonds, Treasury bills, and fixed deposits is included in the category of treasury investment income. This amount, N2.141 billion, is a 5.47% increase over the N2.030 billion earned in 2022. Additionally, the investment’s income accounted for 25.79% of the group’s overall revenue.

One of the fundamental expenses of investing is transaction fees or charges, which are normally assessed each time your bid or offer is accepted. Every fee is expressed as a percentage of the sales or purchase consideration.

Bonds, Treasury Bills, and bank fixed deposit income are all examples of treasury investment income.

The NGX and other investment institutions should continue to benefit from higher treasury investment revenue following the Central Bank of Nigeria’s (CBN) decision to raise interest rates by 24.75%.

The Monetary Policy Committee (MPC) of the CBN raised the benchmark interest rate from 22.75% to 24.75%, a 200 basis point rise.

At the conclusion of the 294th MPC meeting, which was held in Abuja, this was revealed by the Governor of the CBN, who also serves as the MPC Chairman.

Additionally, the central bank kept the liquidity ratio at 30% while raising the CRR of merchant banks from 10% to 14%. The CRR of the apex bank was kept at 45%, unchanged from its last meeting.

The current Monetary Policy Rate (MPR), which is 24.75%, is remarkably high and reflects the bank’s resolute efforts to combat inflation and swings in exchange rates.

Even while this 200 basis point increase is significant, it is not as much as the bank’s significant 400 basis point increase from February.

Investment experts say that just as investors migrate from stocks to other asset classes, particularly money market instruments, when interest rates are high, they also typically shift their money from money market instruments to the stock market for a better yield when interest rates are low.

Key financial highlights:

In spite of economic challenges, NGX Group Plc’s financial results for the entire year 2023 revealed a profit after taxes of N5.250 billion. 

• The information was disclosed in the group’s financial report, which The News Chronicles made available to the investing public as well as the Nigerian Exchange Limited.
• The profit after tax for the group saw a significant uptick, amounting to an astounding 788% increase over the N591.509 million reported in the preceding year of 2022.
• Furthermore, NGX revealed a pre-tax profit of N5.271 billion, signifying an astounding 636% increase.
• From N7.499 billion reported in FY 2022 to N11.803 billion, the group’s total income increased by 57.39%.